Interconnecting Islamic Finance and Halal Industry: A Comparative Analysis of Indonesia, Malaysia, and Thailand’s Halal Ecosystem Development

DOI

10.2991/978-94-6463-918-6_10How to use a DOI?

Keywords

Islamic finance; halal industry; halal ecosystem; Southeast Asia; Islamic banking

Abstract

This study examines the interconnection between Islamic finance and the halal industry across three Southeast Asian nations: Indonesia, Malaysia, and Thailand. Using a mixed-methods approach combining Analytical Network Process (ANP), Structural Equation Modeling (SEM-PLS), and SWOT analysis, the research analyzes data from 58 respondents including academics, practitioners, and regulators. The study identifies twelve critical dimensions affecting halal ecosystem development, with coordination effectiveness, halal standardization, and technology urgency emerging as primary concerns. Findings reveal significant variations in regulatory frameworks: Indonesia implements mandatory halal certification, while Malaysia and Thailand maintain voluntary systems. Malaysia demonstrates the most advanced integration between Islamic banking and halal industry through specialized financing products and government incentives, whereas Indonesia lacks specific policy frameworks connecting these sectors. Thailand, despite its non-Muslim majority, has successfully developed halal export capabilities through strategic partnerships with Middle Eastern countries. The research reveals three significant correlations: Authority Institution of Fatwa influences regulation (35.5%), financial constraints affect interconnection (41.8%), and halal risk management impacts regulation (56.7%). Key challenges include certification costs, regulatory complexity, limited awareness, and supply chain compliance issues. The study recommends that Indonesia develop specific Islamic banking products for halal businesses, Malaysia continue strengthening its integrated approach, and Thailand diversify its Islamic financial system. Policy harmonization across the three countries is essential for standardization and mutual recognition. This research contributes to understanding halal ecosystem dynamics and provides strategic recommendations for enhancing Islamic finance-halal industry integration in Southeast Asia, offering valuable insights for policymakers, financial institutions, and halal industry stakeholders.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Euis Amalia
AU  - Rini Rini
PY  - 2025
DA  - 2025/12/16
TI  - Interconnecting Islamic Finance and Halal Industry: A Comparative Analysis of Indonesia, Malaysia, and Thailand’s Halal Ecosystem Development
BT  - Proceedings of the 9th International Conference on Strategic and Global Studies 2025 ((ICSGS 2025)
PB  - Atlantis Press
SP  - 145
EP  - 162
SN  - 2667-128X
UR  - https://doi.org/10.2991/978-94-6463-918-6_10
DO  - 10.2991/978-94-6463-918-6_10
ID  - Amalia2025
ER  -