Factors affecting intention to adopt halal practices: case study of Indonesian small and medium enterprises

Abstract

Purpose This study aims to investigate the effect of religiosity, government support, consumer demand, the expectation for higher revenue and competition intensity on Indonesian small and medium-sized enterprises’ (SMEs) intention to adopt halal practices. Design/methodology/approach This study used a quantitative approach and surveyed 228 SME owners through electronic media and direct contact. The study then applied the structural equation modeling to evaluate the relationship between constructs. This study also conducted some modifications on the hypotheses structured to obtain the best model. Findings This study found that religiosity, government support and expectation for higher revenue have positive and significant effects on SMEs’ intention to adopt halal practices; conversely, consumer demand and competition intensity do not have significant effects. Originality/value While in Indonesia, many studies have been conducted on consumers as subjects concerning halal awareness and they revealed a positive effect on the intention to consume the products, still, to the best of the authors’ knowledge, there are no studies targeting producers, especially SMEs, as the research subjects. This study had fulfilled some gaps on contributing factors that encourage the adoption of halal practices on the producers’ side, especially on SMEs. Therefore, this study provided insights into how to bridge the producers’ and consumers’ interests regarding halal fulfillment. The findings also provided input on the policy formulation at the early stage of halal policy implementation.

A systematic review on halal cosmetic consumption: application of theory method context – attributes decision outcome framework

“…Consequently, these consumers experience a unique and robust bond (Silalahi et al, 2021) with halal cosmetics, which further leads to intention to purchase. In a similar vein, Aoun and Tournois (2015) found that a spiritual ethos or dimension rooted in the religious belief system affects halal cosmetics consumption.…”

“…This way, religiosity is regarded as a subset of spirituality (Phipps and Benefiel, 2013). Silalahi et al (2021); Tuhin et al (2020); and Garg and Joshi (2018) found that consumers with high religiosity tend to follow the doctrines of their religion. This includes following halal consumption guidelines.…”

The Influence of Religiosity and Transparency on Production Factors of Sharecrops and Sharecropping Contract in East Java

“…This means the farmer would always only use the halal product for the production factors, for example, halal fertilize, halal seed, and so on. As well as the other aspect for cultivating the land crops are always considered by the farmer for halal aspect only (Silalahi et al, 2021;Sulaiman, 2020).…”

Corporate social responsibility as an effective promotional tool for the Malaysian halal certified companies in the era of Covid-19

“…Amongst others, Muharam and Asutay (2019) find that most of the hotels investigated are committed to halal best practices by providing information that articulates Islamic identity or by informing the existence of prayer facilities. With respect to why halal businesses are committed to halal best practices, Silalahi et al (2020) find that religiosity, government support and expectation for higher revenue are the major reasons that contributed to the adoption of halal best practices. Othman et al (2016aOthman et al ( , 2016b show that the commitment to halal best practices is positively related to firm performance in Malaysia.…”