Analysis of The Impact of the Role of Halal Authority on the Economy

Abstract

Halal Value Chain has an important role in a country but many countries ignore halal authority. In addition, based on the results of previous research studies discussing halal authority have shown that halal authority able to reduce information asymmetry in a product. This is very needed by Muslims around the world. This study aims to determine the relationship between dynamic transformation which includes 3 sectors contributing services, agriculture, and industry with the halal authority in a country. This study uses panel data consisting of 228 countries. All of the total countries, only 45 countries have halal authority. This data processing process uses stata. This study uses a static panel analysis method, namely the random effect model and common effect regression and dynamic panels. The results of this study state that the existence of a halal value chain affects the transformation of a country that details are halal authorities have a significant relationship to service contributions, halal authorities have a significant relationship to agricultural contributions, halal authorities have a significant relationship to industry contributions to Gross Domestic Product (GDP) by including control variables such as access electricity, individual using the internet, domestic credit to private sector, household and final consumption expenditure.