Moh Agus Nugroho, Asfi Manzilati, Marlina Ekawaty, Nurul Badriyah, Sulaeman Sulaeman
Purpose – The halal industry has experienced significant growth in recent years, becoming an increasingly vital sector within the global economy. Understanding the factors driving this expansion is essential for both policy makers and investors. This paper aims to analyze the contribution of domestic investment and foreign direct investment (FDI) to the growth of the halal industry, with economic freedom serving as a moderating variable. Design/methodology/approach – Using the data from the top 10 countries ranked by the Global Islamic Economy Indicator (GIEI) between 2014 and 2022, this study uses a quantitative approach. It uses correlational and explanatory analyses through partial least squares structural equation modeling. Findings – The results indicate that FDI has a significant impact on the halal industry, both directly and through the mediating influence of economic freedom. In contrast, domestic investment does not exert a significant effect, either directly or via economic freedom. Practical implications – These findings suggest that governments and policymakers in countries with burgeoning halal sectors should prioritize attracting and supporting FDI. Given the minimal influence of domestic investment, FDI strategies must align with broader economic policies to effectively foster growth in the sector. Originality/value – This paper is the first to empirically investigate the roles of domestic investment, FDI and economic freedom in driving halal industry growth in the top-ranked GIEI countries. By providing practical implications for policymakers, it offers novel insights into how economic policies can shape investment effectiveness in halal industries. © 2025 Emerald Publishing Limited
Faculty of Economics and Business, Brawijaya University, Malang, Indonesia; Faculty of Economics and Business, Brawijaya University, Malang, Indonesia; Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia
