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Determinants of Malaysia’s Halal Trade Flow: Influence of Halal Certifications and Muslim Population

This paper aims to investigate the influence of Halal trade costs, certification, and Muslim population size on Halal trade flows. While the Halal exports are growing steadily, the performance is still very far from the targeted growth. Thus, an understanding of the determinants of Halal export flows is essential. This study utilizes the structural gravity model by Heid et al. (2017) using actual Halal export data from 2010 to 2018. Findings indicated that Halal certification and Muslim population have a positive influence on trade flows while importers per capita income, as well as common border effect, flows adversely. This study contributes to the body of knowledge by measuring the influence of Halal certification, and Muslim's demand on Halal exports flows using actual total Halal exports. It suggests a definition of halal industry as well as some policy recommendations and strategic promotion of Halal exports.