Global Value Chain: Islamic Economics and Finance Position
The growing number of Muslim populations promotes significant development on Islamic economic and finance activities called halal industry. While the halal industry is experiencing positive growth in the last four years, the Global Value Chain (GVC) – the chain of system that drives international trades and global economic activities – remains stagnant. The present study aims to explain the position of the Islamic economics and finance in the GVC. This study employs a qualitative-descriptive method with systematic literature review approach. By collecting secondary data using strict-processing stages and content analysis techniques, the author manages to meet the study’s purpose. The findings suggest that the Islamic economics and finance have opportunities to boost countries' participation in the GVC activities by harmonizing halal standardization, enhancing financial infrastructures, and providing various financial products. This study contributes to generate government policies and enterprises' decisions in developing the Islamic economics and finance within the GVC framework. It further provides initial insights and potential topics for future studies.
Keywords : Global Islamic Economy; Halal Industry; Value Chain; Islamic Economics; Islamic Finance
- Al-Teinaz, Y. R., Al-Mazeedi, H. M. M. (2020). Halal Certification and International Halal Standards. The Halal Food Hand Book (Chapter 15). London: Wiley Blackwell.
- Baldwin, R. (2011). Trade and Industrialisation after Globalisation's 2nd Unbundling: How Building and Joining a Supply Chain are Different and Why It Matters. NBER Working Paper Series 17716. https://10.3386/w17716
- Basias, N., & Pollalis, Y. (2018). Quantitative and Qualitative Research in Business & Technology: Justifying a Suitable Research Methodology. Review of Integrative Business & Economics Research, 7(1), 91-105.
- Cheng, C. Y., Chien, M. S., & Lee, C. C. (2021). ICT diffusion, financial development, and economic growth: An international cross-country analysis. Economic modelling, 94, 662-671. https://doi.org/10.1016/j.econmod.2020.02.008
- Chinazzi, M., Davis, J. T., Ajelli, M., Gioannini, C., Litvinova, M. (2020). The Effect of Travel Restrictions on the Spread of the 2019 Novel Coronavirus (COVID-19) Outbreak. Science, 368(6489), 395-400. https://doi.org. 10.1126/science.aba9757
- Dachs, B., & Pahl, S. (2019, July 26). Are Global Value Chains in Decline?. The London School of Economics and Political Science. https://blogs.lse.ac.uk/gild/2019/07/26/are-global-value-chains-in-decline/
- Diakantoni, A., Escaith, H., Roberts, M., & Verbeet, T. (2017). Accumulating Trade Costs and Competitiveness in Global Valu Chains. WTO Working Paper No. ERSD-2017-02
- DinarStandard, (2019). Driving the Islamic Economy Revolution 4.0. The Global Islamic Economy Report 2019/2020
- El-Gohary, H. (2020). Coronavirus and Halal Tourism and Hospitality Industry: Is It a Journey to the Unknown?. Sustainability, 12(21), 1-26. https://doi.org/10.3390/su12219260
- Evan, A., & Syed, S. (2015). From Niche to Mainstream Halal Goes Global. International Trade Center Report.
- Fernandez-Stark, K. & Gereffi, G. (2019). Global Value Chain Analysis: A Primer. Handbook on Global Value Chain, UK: Edward Elgar Publishing.
- Gereffi, G. (2014). Global value chains in a post-Washington Consensus world. Review of International Political Economy, 21(1), 9-37. https://doi.org/10.1080/09692290.2012.756414
- Guan, D., Wang, D., Hallegatte, S., Davis, S. J., Huo, J. (2020). Global supply-chain effects of COVID-19 control measures. Nature Human Behavior, 4, 577-587.
- Guru, B. K., & Yadav, I. S. (2019). Financial development and economic growth: panel evidence from BRICS. Journal of Economics, Finance and Administrative Science, 24(47), 113-126. https://doi.org/10.1108/JEFAS-12-2017-0125
- Halim, M. A., & Salleh, M. M. (2012). The Possibility of Uniformity on Halal Standards in Organization of Islamic Countries (OIC) Country. World Applied Sciences Journal, 17, 6-10.
- Hasanah, N. U., Safira, M. E., Agung, W. K. S., Chotib, M., Nimasari, E. P., & Lahuri, S. B. (2021). Regulation of Halal and Healthy Products for Small-scaled Businesses as Consumer Protection. Open Access Macedonian Journal of Medical Sciences, 9(E), 749-753. https://doi.org/10.3889/oamjms.2021.6643
- Hayakawa, K., & Mukunoki, H. (2020). Impacts of COVID-19 on International Trade: Evidence from the First Quarter of 2020. Institute of Developing Economies Discussion Paper, No. 791. https://www.ide.go.jp
- Hayakawa, K., & Mukunoki, H. (2021). Impacts of Covid-19 on Global Value Chains. Developing Economies, 59(2), 154-177. https://doi.org/10.1111/deve.12275
- Hidayat, S.E., Rafiki, A. and Nasution, M.D.T.P. (2021). Halal industry’s response to a current and post-COVID-19 landscape and lessons from the past. Journal of Islamic Marketing. https://doi.org/10.1108/JIMA-06-2020-0180
- Hossain, M. (2021). The effect of the Covid-19 on sharing economy activities. Journal of Cleaner Production, 280(1), 1-9. https://doi.org/10.1016/j.jclepro.2020.124782
- Hsiang, M., Allen, D., Annan-Phan, S., Bell, K., Bolliger, I., Chong, T. (2020). The Effect of Large-Scale Anti-Contagion Policies on the COVID-19 Pandemic. Nature, 584, 262-267. https://doi.org/10.1038/s41586-020-2404-8
- Ignatenko, A., Raei, F., & Mircheva, B. (2019). Global Value Chains: What are the Benefits and Why Do Countries Participate?. IMF Working Paper WP/19/18.
- Irwin, J. (2015). Ethical Consumerism Isn't Dead. It Just Needs Better Marketing. Harvard Business Review. https://hbr.org/2015/01/ethical-consumerism-isnt-dead-it-just-needs-better-marketing.
- Jaklic, A., Stare, M., & Knez, K. (2020). Changes in Global Value Chains and the Covid-19 Pandemic. Teorija in Praksa, 57(4), 1042-1064.
- Kamarulzaman, N.H., Muhamad, N.A. and Mohd Nawi, N. (2021). An investigation of adoption intention of halal traceability system among food SMEs. Journal of Islamic Marketing. https://doi.org/10.1108/JIMA-11-2020-0349
- Koberg, E., & Longoni, A. (2019). A systematic review of sustainable supply chain management in global supply chains. Journal of Cleaner Production, 207, 1084-1098. https://doi.org/10.1016/j.jclepro.2018.10.033
- Koveshnikov, A., Tienari, J., & Piekkari, R. (2019). Gender in international business journals: A review and conceptualization of MNCs as gendered social spaces. Journal of World Business, 54(1), 37-53.
- Kowalski, P. (2011). Comparative Advantage and Trade Performance: Policy Implications. OECD Trade Policy Papers, No. 121.
- Kowalski, P., Gonzalez, J. L., Ragoussis, A., & Ugarte, C. (2015). Participation of Developing Countries in Global Value Chain: Implications for Trade and Trade-Related Policies. OECD Trade Policy Papers, No. 179.
- Kummritz, V., & Quast, B. (2016). Global Value Chain in Low-and Middle-Income Countries. CTEI Working Paper No. 2016-10.
- Latif, M. A. (2020). Halal International Standards and Certification. The Halal Food Hand Book (Chapter 14). London: Wiley Blackwell.
- Li, X., Meng, B., & Wang, Z. (2019). Recent patterns of global production and GVC participation, Global Value Chain Development Report 2019: Technological Innovation, Supply Chain Trade, and Workers in A Globalized World. https://doi.org/10.30875/6aa1a271-en
- Marchi, V. D., Maria, E. D., Golini, R., & Perri, A. (2020). Nurturing International Business Research through Global Value Chains Literature: A Review and Discussion of Future Research Opportunities. International Business Review, 29(5), 1-16. https://doi.org/10.1016/j.ibusrev.2020.101708
- McWilliam, S. E., Kim, J. K., Mudambi, R., Nielsen, B. B. (2020). Global value chain governance: Intersections with international business. Journal of World Business, 55(1), 1-18.
- Mubarok, F. K., & Imam, M. K. (2020). Halal Industry in Indonesia; Challenges and Opprtunities. Journal of Digital Marketing and Halal Industry, 2(1), 55-64. http://dx.doi.org/10.21580/jdmhi.2020.2.1.5856
- Novikov, V., Yarushkina, E., Britikova, E., & Kovalenko, L. (2019). Islamic Banking in the Global Financial System: Current Situation and Global Environment. Advances in Economics, Business, and Management Research, 110, 138-143.
- OIC Economic Outlook. (2019). OIC - 2025: Programs of Action: Progress Report 2018-2019. https://www.oic-oci.org/upload/documents/POA/en/progress_report_2018_2019_en.pdf.
- Pahl, S., & Timmer, M. P. (2020). Do Global Value Chain Enhance Economic Upgrading? A Long View. The Journal of Development Studies, 56(9), 1683-1705. https://doi.org/10.1080/00220388.2019.1702159
- Park, M., & Jamaludin, M. A. (2018). A framework of Halal Industry Support System in non-Muslim Country: Focusing on South Korea. Journal of Halal Industry & Services, 1(1), 1-14
- PEW Research Center Forum on Religion & Public Life. (2011). The Future of The Global Muslim Population: Projection for 2010-2030. https://www.pewforum.org/2011/01/27/the-future-of-the-global-muslim-population/
- Rabbani, M. R., Khan, S., & Thalassinos, E. I. (2020). FinTech, Blockchain and Islamic Finance: An Extensive Literature Review. International Journal of Economics and Business Administration, 8(2), 65-86. https://doi.org/10.35808/ijeba/444
- Sanchez-Romero, M., Abio, G., Patxot, C., Souto, G. (2018). Contribution of Demography to Economic Growth. SERIEs: Journal of the Spanish Economic Association, 9, 27-64. https://doi.org/10.1007/s13209-017-0164-y
- Sari, D. P., Jaswir, I., & Daud, M. R. B. H. C. (2021). Factors Affecting the Successful Implementation of MS1500 by Malaysian Halal Food Industry. International Journal of Halal Research, 3(2), 102-112. https://doi.org/10.18517/ijhr.3.2.102-112.2021
- SESRIC (Statistical, Economic, and Social Research and Training Centre for Islamic Countries). (2019). OIC Economic Outlook 2019: Mobilizing Financial Resources for Development. https://sesric.org
- Sukmana, R. (2020). Critical assessment of Islamic Endowment Funds (Waqf) Literature: Lesson from Government and Future Studies. Heliyon, 6(10), 1-14. https://doi.org/10.1016/j.heliyon.2020.e05074
- Thomson Reuters. (2018). The Global Islamic Economy Report 2018/19: An Inclusive Ethical Economy. https://.salaamgateway.com
- Todo, Y., Akman, M. S., Hattori, T., Saha, S., & Volchkova, N. (2019). Expanding and Restructuring Global Value Chains for Sustainable and Inclusive Growth. Think20 (T20) Policy Briefs 2019. http://t20japan.org/policy-brief-expanding-restructuring-gvc-sustainable-growth/
- Verschuur, J., Koks, E. E., Hall, J. W. (2021). Global Economic Impacts of COVID-19 Lockdown Measures Stand out in High- Frequency Shipping Data. PLoS ONE, 16(4), 1-16. https://doi.org/10.1371/journal.pone.0248818
- Wang, D., Zhou, T., Lan, F., & Wang, M. (2021). ICT and socio-economic development: Evidence from a spatial panel data analysis in China. Telecommunications Policy, 45(7), 102-118. https://doi.org.10.1016/j.telpol.2021.102173
- Weller, C. E., & Zulfiqar, G. (2013). Financial Market Diversity and Macroeconomic Stability. Political Economy Research Institute's Working Paper Series, No. 332.
- World Bank. (2020). Trading for Development in the Age of Global Value Chains. World Development Report 2020. Washington DC: World Bank. https://openknowledge.worldbank.org/handle/10986/32437