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Jurisprudence and demand for halal meat in OIC

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 British Food Journal
Jurisprudence and demand for halal meat in OIC
Imran Majeed, Hussein Al-Zyoud, Naved Ahmad,
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To cite this document:
Imran Majeed, Hussein Al-Zyoud, Naved Ahmad, (2019) "Jurisprudence and demand for halal
meat in OIC", British Food Journal, Vol. 121 Issue: 7, pp.1614-1626, https://doi.org/10.1108/
BFJ-08-2018-0562
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BFJ
121,7
1614
Received 30 August 2018
Revised 13 February 2019
Accepted 26 April 2019
Downloaded by Doctor Naved Ahmad At 10:37 12 June 2019 (PT)
British Food Journal
Vol. 121 No. 7, 2019
pp. 1614-1626
© Emerald Publishing Limited
0007-070X
DOI 10.1108/BFJ-08-2018-0562
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0007-070X.htm
Jurisprudence and demand for
halal meat in OIC
Imran Majeed
International Centre for Education in Islamic Finance,
Lorong Universiti A, Kuala Lumpur, Malaysia
Hussein Al-Zyoud
Faculty of Business, Athabasca University, Athabasca, Canada, and
Naved Ahmad
Donald School of Business, Red Deer College, Red Deer, Canada;
Faculty of Business, Athabasca University, Athabasca, Canada and
Department of Economics, Institute of Business Administration (IBA),
Karachi, Pakistan
Abstract
Purpose – The purpose of this paper is to estimate the import demand function for halal meat in member
countries of the Organization of Islamic Cooperation (OIC) and to suggest some policy recommendations for
OIC members that can enhance intra-OIC halal meat trade.
Design/methodology/approach – By using an augmented gravity model, this study empirically estimates
the major determinants of halal meat import demand in OIC member countries. Moreover, a major
determinant is the difference in Islamic jurisprudence (fiqh).
Findings – The results of this study show that the variation in Islamic jurisprudence is one of the primary
determinants of intra-regional trade of halal meat import demand in OIC member countries.
Research limitations/implications – Although trade flows are set up in several years and lag variables
are well capable to examine trade flows, this study only includes the static nature of halal meat trade flows
toward selected top 20 OIC member countries.
Practical implications – This study suggests that developing a common halal meat market and one halal
certification body under the OIC can enhance intra-OIC halal meat trade, this may be a challenge given the
five diverse interpretations of halal meat within Islamic jurisprudence among OIC member countries.
Originality/value – This paper identifies the role of Islamic jurisprudence ( fiqh) in determining the import
demand of halal meat in OIC countries, which has not been addressed in empirical literature. It also provides
some policy implications to ameliorate the declining trend of intra-OIC trade flows of halal meat.
Keywords Islamic jurisprudence, Halal meat, Import demand, Augmented gravity model, OIC members
Paper type Research paper
1. Introduction
Organization of Islamic Cooperation (OIC), formerly the Organization of the Islamic
Conference, is the second largest organization after the United Nations. Since its
establishment in September 1969, the OIC has aimed to enhance and promote the intra-
regional trade of goods and services, including halal meat among member countries, and
this ambition was also added to the OIC’s initial charter.
The halal food market is one of the fastest growing consumer sectors of the world,
reflecting its growing acceptance among Muslims as well as non-Muslims. This acceptance
goes beyond its compliance with shariah law and is linked to its hygiene, quality and ethical
(i.e. method of slaughtering) standards. In the UK, for instance, the Muslim population was
2m in 2008, but 6m halal food consumers existed at that time (Gregory, 2008). Due to a
substantial increase in population, income and awareness among Muslims – and with Islam
the second largest religion after Christianity – global expenditures by Muslims on halal food
and beverages showed a 4.3 percent increase from 2012 to 2013 (Thomson Reuters, 2015).
These expenditures by Muslims were 16.6 and 17.7 percent of the global food expenditures
 in 2012 and 2013, respectively. It is expected that expenditures by Muslims worldwide on Jurisprudence
halal food will double by 2019. and demand
Over the last few years, several advancements have come into force that reveal the global for halal meat
interest in this market. For example, the Halal Food Indicator (HFI) has been developed to
highlight the health of the “halal food ecosystem.” Moreover, the Standards and Metrology
Institute for Islamic Countries (SMIIC), under the umbrella of the OIC, is responsible for
developing a single halal standard for all OIC member states. The development of HFI and 1615
efforts by SMIIC to set a single global halal standard are the signs of increasing interest in
halal meat intra-OIC trade. This increasing interest is because of the two major reasons. First,
OIC countries appear as a bunch on the map of world. They are all almost adjacent to each
other. However, they import halal meat mostly from countries which are non-adjacent to OIC
bloc, i.e. Australia, Brazil, Argentina, the USA etc. Hence, OIC members bear an extra cost due
to greater distance between the trading partners as suggested by the theory of trade gravity
model. Therefore, the increase in intra-OIC halal meat trade would ensure the decrease in
trading cost. Second, halal meat requires a specific method of slaughtering as recognized by
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sharia. “Halal certification” ensures, along with other benchmarks, that whether an animal has
been slaughtered in compliance with sharia rulings or not? Due to several reasons, halal
certification becomes difficult in non-OIC countries as compared with OIC. Therefore, there
remains an ambiguity regarding the slaughtering in non-OIC exporters. To cater this issue,
OIC has set up a separate sub-organization SMIIC. So, due to these reasons, the OIC members
would prefer to import from other OIC members as opposed to non-OIC countries.
The foundation of the concept of halal/permissible/lawful is completely driven from the
Holy Quran. “Halal” means what is permissible and allowed in Islam, while, in contrast, the
word “haram” defines non-permissible and unlawful things. These concepts of halal and
haram are not only merely confined to goods, but also apply to services, deeds and actions
that are allowed or forbidden in Islam. In the modern world, then, the meaning of the global
halal market widens to include finance, food, pharmaceuticals, health products, travel,
media, logistics, marketing, lifestyle and so on. However, the focus of this study is halal meat
only. A verse from the Quran identifies haram meat as:
HE has only forbidden you carcass meat, blood, pork and that which has been slaughtered for other
than GOD (ALLAH). But if one is compelled (by hunger), without defiance and with no indulgence,
then there is no sin in it. ALLAH is indeed the infinitely Merciful Eternal Saviour. (2:173)

Almost all members of the OIC are developing countries. Their trade and development
growth rate is below the rate of the developed countries. Their dependence upon non-OIC
countries is increasing day by day. They are losing their intra-regional trade share in all
commodities, and halal meat is not an exception. For instance, total exports of OIC members
declined by 3 percent (from $2.22 trillion in 2013 to $2.15 trillion in 2014). Food products
contributed 8 percent (or $172bn) of total exports. While on the other hand, total imports by
the OIC members increased by 2.2 percent ($1.97 trillion in 2013 to $2.01 trillion in 2014), and
12 percent (or$ 241bn) of these imports were food products. It is evident from the above facts
that the share of food products in OIC’s exports is less than its share in imports. Therefore,
OIC members, as a whole, are facing a trade deficit of $69bn in food products. Apparently,
halal meat is the major part of halal food. So, this study aims to investigate the determinants
that derive these halal meat trade inflows to OIC, and why OIC members are losing their
intra-OIC trade share in halal meat? And to suggest some policy recommendations that can
help OIC to achieve the task of increased intra-OIC trade. A descriptive analysis regarding
OIC’s inter- and intra-trade is presented in the next paragraphs.
OIC inter- and intra-regional trade has been calculated for all the commodities, and for
meat only, and have plotted these values in Figures 1 and 2, respectively. A quick perusal of
these two figures suggests that the value of intra-regional trade (trade among OIC members)
 BFJ 6,000
121,7 5,000
OIC Intra-regional
OIC Inter-regional
4,000

3,000
1616
2,000
Figure 1. 1,000
OIC inter- and
intra-regional trade in
all commodities 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
(billion US$)
Source: Authors’ calculations based upon data from trade map
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18,000
OIC Intra-regional
16,000
OIC Inter-regional
14,000
12,000
10,000
8,000
6,000
4,000
Figure 2. 2,000
OIC inter- and intra- 0
regional trade in meat 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
only (million US$)
Source: Authors’ calculations based upon data from trade map

has been low for all commodities and meat, whereas the value of inter-regional trade (trade
between OIC and the rest of the world) has been increasing over the years. The top 5
exporters of “meat and live animals” to the OIC are non-OIC countries (Australia, Brazil,
France, India and the USA).
The trade literature has used gravity models to estimate the import demand function of
meat. However, the empirical literature on the determinants of import demand for halal meat
for OIC member countries is scant. The traditional gravity model was first time employed,
as per our knowledge, by W. Koo et al. (1994) to examine bilateral trade flows of meat among
22 countries and using panel data for the time period (1983–1989). This study was not
confined to halal meat and OIC countries. He argued that, unlike traditional gravity models
of aggregate bilateral trade of goods in Anderson (1979) and Bergstrand (1985), the
commodity specific gravity model is eligible to incorporate those policies and specifications
that are associated with international trade of a particular commodity. He concluded that
policies imposed by importing country influence trade flows of meat more than those
implemented by exporting country; and a subsidy to exporters provided by exporting
country has no effect over trade flows of meat. While long-term trade agreements between
partners positively affect trade flows. To examine the volume of intra-Arab trade – where
Arab countries are the primary founders of OIC – gravity equation was employed by
Al-Atrash and Yousef (2000) in an IMF working paper. Using aggregate trade data – all
commodities – of 18 Arab countries for the time period (1995–1997), they found that,
 according to estimated results, intra-Arab trade should be 10–15 percent greater than what Jurisprudence
is observed. These findings reveal that there is more space for regional and multilateral and demand
integration among Arab countries. Bendjilali (2000), using a gravity model, confirmed that for halal meat
the size of the economies and the Islamic Development Bank’s trade financing enhance intra-
OIC trade, whereas transportation and communication costs reduce intra-OIC trade.
Gundogdu (2009) examined the determinants of intra-OIC trade by using a gravity model for
the period of 1995–2007. The study highlighted four important determinants of intra-OIC 1617
trade: tariffs, trade facilitation and liberalization, the real exchange rate, and the exchange
rate between the US$ and euro. The author also concludes that the increase from 14.4 to 17.6
percent (between 2002 and 2006) in OIC intra-regional imports is not due to OIC
membership. Poon and Hooy (2013) also estimated import demand function for OIC
countries and showed that exchange rate volatility induces import demand. Moreover, when
OIC member countries achieved a threshold level of 30 percent of trade value to real GDP,
the effect of exchange rate volatility is positive for exports and negative for imports.
Hassan et al. (2010) examined the role of various sub-regional groupings, such as the Arab
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Maghreb Union, the Council of Arab Economic Unity, the Gulf Cooperation Council and the
Economic Co-operation Organization within OIC member countries, using a gravity model.
Ismail and Mawar (2012) examined the impact of OIC membership on Malaysian exports, also
using a gravity model. The study concludes that the effect of OIC membership is positive but
insignificant on Malaysian exports. Wardani (2016) examined the effects of OIC membership
on exports from Malaysia and Indonesia. They also considered OIC membership as a dummy
for religion but did not explore different Islamic jurisprudence among OIC member countries.
The study supports Ismail and Mawar’s (2012) results that OIC membership has a positive but
insignificant effect on Malaysian exports. The study, however, concludes that OIC
membership has a positive and significant effect on Indonesian exports.
Ghani (2007), using cross-sectional data and a gravity model, tested the impact of OIC
membership on OIC trade and found that the impact of membership is negative and significant;
however, theoretical models usually predict a positive and insignificant impact (Ismail and
Mawar, 2012). The author concluded that improved institutional quality and governance, and
reduction of conflicts within their borders increase trade volume among OIC members.
The above studies focus on overall trade in OIC member countries using gravity models
and discuss the role of OIC membership. The interest in this study lies especially in the
literature on the demand for halal meat, but there is little on cross-sectional settings. Kabir
(2015) talked about the halal meat industry and argued that Australia (a non-OIC member)
stays far behind in the race to enter the halal meat industry. The study concluded that
collaborating with Muslim countries would help Australia increase its trade in the global halal
bovine meat market. There is clearly a gap in the literature regarding the import demand for
halal meat by OIC countries. While the current literature does discuss the role of OIC
membership, it does not recognize the importance of different Islamic jurisprudence among OIC
member countries. This study aims to analyze the halal meat import demand in OIC countries
and to examine the role of different Islamic jurisprudence by employing a static augmented
trade gravity model. The general results of the above studies show that OIC membership has a
negative impact on intra-regional trade among OIC countries. This contradicts the general
perception that OIC membership has a positive impact on intra-regional trade. This paper
argues that the importance and efficacy of OIC membership is undermined because of different
Islamic jurisprudence across the member countries. The analysis also provides some policy
recommendations for how OIC countries can grab the major share of this market.

2. Interpretation of shariah law

Discrepancies among national halal standards of the OIC member states, lack of cognitive
communication among nations and various interpretations of Muslim jurists regarding
 BFJ halal slaughtering process and halal animals are the major reasons that create obstacles
121,7 to the formulation of a single globally excepted halal standard. Although OIC has formed
SMIIC to tackle this issue, an internationally acceptable standard of halal meat
production is still absent due to the causes mentioned above. Some of the major
differences in jurists’ views are presented in next paragraphs. These differences stand
responsible for the absence of global halal standard; as a result, real market of intra-OIC
1618 halal meat is affected.
Among OIC member countries, people follow different shariah interpretations. There are
five schools of thought (SOT) about halal meat, for example, which entail some differences
regarding the method of slaughtering and specifications of halal animals (Hanafi, Shafi,
Hanbali, Maliki and Shia). According to shariah law, slaughtering in a proper manner as
prescribed by Islamic law is compulsory to make the meat of specific animals “halal.”
Foundational among the requirements is invoking the name of Allah at the time of
slaughtering. This is a mandatory condition for meat to classify it as halal, according to the
Hanafi, Hanbali, Maliki and Shia orientations, although for the Shafi school of thought, this
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is not required for the meat to become halal. Similarly, three SOTs (Hanbali, Maliki and
Shafi) make the intension (in Arabic ‫ )ﺍﻟﻨﯿۃ‬obligatory for the person who is slaughtering the
animal. They believe that if someone slaughters an animal in a proper way according to
sharia, but his intension is only to kill the animal and not to make its meat halal, the meat
will remain haram. On the other side, remaining schools do not make it an obligation;
however, they consider it a good thing.
Diversity also exists with respect to fish and locusts (in Arabic ‫)ﺍﳉﺮﺍﺩ‬. While generally
this meat can be eaten by Muslims without proper slaughtering, the Hanafi and Shia views
diverge. The Hanafi perspective is that only fish – regardless of whether the fish has scales
can be treated as “halal animal” among the all aquatic animals. Thus, the meat of all other
aquatic animals is not halal according to them. In contrast, the Shia view is that fish and
locusts are innately halal, and thus their status is not affected by how they are slaughtered.
The remaining three SOTs (Shafi, Maliki and Hanbali) hold that all aquatic animals are halal
and their meat can be eaten as well.
The halal slaughter approach focuses on four parts of the animal’s neck anatomy: the
trachea (or windpipe), the esophagus (or food-tract) and the two jugular veins. All SOT
prefer cutting across all four anatomical structures as the best method of slaughtering;
however, they differ in their minimum criteria. The Hanbali and Shia perspectives maintain
that all four structures must be cut before the death of an animal for the meat to be “halal.”
On the other hand, for the Hanafi school, only three structures in any combination are
obligatory. For the Maliki, the two jugular veins and the trachea must be fully cut. The Shafi
require the cutting of the two jugular veins and the esophagus. The Hanafi, Shafi, Hanbali
and Maliki all hold that any sharp thing capable of cutting animals’ veins – such as iron,
wood, glass or bone – can be used to slaughter. However, the Shia require that the knife be
made up of pure iron or iron mixed with steel. Moreover, according to Maliki school of
thought, it is mandatory to cut the animal’s neck from the front side, to make its meat halal.
So, if someone cuts all the four veins of the animal from nape (back side of the neck), the
meat of this animal will become “haram” according to Maliki school of thought, while all
other schools never consider this condition as obligation.
In light of these differences, a dummy variable has been used for these five SOT in
employed augmented gravity model. This paper attempts to show that this variation in
Islamic jurisprudence in the member countries has a negative impact on intra-regional trade
among OIC.
The study is organized as follows: Section 2 describes the methodology and data sources
of this empirical analysis. Section 3 presents the empirical results and the final section
concludes the study.
 3. Methodology and data sources Jurisprudence
The following model has been estimated. The main variable in this model is SOT: and demand
ln X ijt ¼ a0 þa1 ln Y it þa2 ln Ljt þa3 ln P jt þa4 ln EXCit þa5 ln POPit þa6 ln Dij
for halal meat

þa7 OICij þa8 Boarderij þ a9 ComLangij þa10 GATTit þa11 SOTij þU ijt ; (1)
where Xijt is the US$ value of halal meat imported by country (i) from country ( j) in time (t), 1619
such that i ¼ 1, 2, 3, …, 20 (selected 20 OIC importing countries), j ¼ 1, 2, 3, …, 50 (selected 50
exporting countries) and t ¼ 2002–2014 (13 years). Halal meat import data were obtained for
10 years (2006–2015) and the value of average imports was used for each country. Based on
the average imports, top 20 OIC member import countries were selected, which are listed in
Table I.
There were 157 countries that exported halal meat to the selected 20 OIC members in the
given time span (2002–2016). The “avg_val” column of Table II shows the average value of
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the halal meat exports of the corresponding country for the 15 year period of 2002–2016.
The first 50 countries have been selected for this analysis as their combined contribution
accounts for close to 100 percent of this import product.
“ln” represents the natural logarithm. “Y” is the per capita gross national income in US$
at purchasing power parity (PPP) of the importer. “L” is the livestock production level of
those animals (buffaloes; camels and camelids; cattle; goats and sheep; chickens, ducks,
geese and guinea fowls, pigeons, turkeys and other birds; rabbits and hares) which can be
used as a source of halal meat. “P” represents the price of the exported halal meat by country
j; “P” is calculated by dividing the dollar value of the exported halal meat by its quantity
(weight in kg). “EXC” is the real effective exchange rate; “POP” is the population size; and
“D” is the great-circle distance (in km) between major cities of the trading partners.
“OIC,” “Boarder,” “ComLang,” “GATT” and “SOT” are dummy variables to incorporate
OIC membership, boarder adjacency, the common official language of the trading partners,
GATT/WTO membership of the importing country and school of thought (Hanafi, Shafi,

S. No. OIC member avg_val ($)

1 Saudi Arabia 2,042,777,472

2 United Arab Emirates 1,077,905,920
3 Egypt 935,413,888
4 Malaysia 588,901,248
5 Kuwait 324,851,936
6 Jordan 297,061,216
7 Oman 217,225,984
8 Qatar 207,656,832
9 Algeria 205,874,960
10 Kazakhstan 195,620,416
11 Iran 188,878,240
12 Indonesia 186,348,624
13 Yemen 175,160,064
14 Bahrain 164,741,152
15 Lebanon 133,608,248
16 Benin 125,181,344
17 Turkey 100,214,520
18 Ivory Coast 71,733,128 Table I.
19 Albania 60,170,164 List of the selected top
20 Kyrgyzstan 46,051,528 20 OIC halal meat
Source: Authors’ calculations based upon data from comtrade.un.org importers (2002–2016)
 BFJ S. No. Exporter avg_val % Cumulative
121,7
1 Brazil 1,943,320,320 0.420734985 0.420734985
2 India 745,564,736 0.161417119 0.582152105
3 Australia 521,734,912 0.112957256 0.69510936
4 France 266,592,976 0.057718221 0.752827581
5 USA 237,356,128 0.051388351 0.804215933
1620 6 New Zealand 195,474,976 0.04232095 0.846536882
7 Pakistan 84,097,800 0.018207439 0.864744321
8 China 73,240,160 0.015856726 0.880601047
9 United Arab Emirates 67,066,104 0.014520023 0.89512107
10 Saudi Arabia 43,438,260 0.00940452 0.904525591
11 Poland 43,117,444 0.009335063 0.913860654
12 Argentina 40,030,444 0.008666718 0.922527371
13 Ethiopia 34,288,272 0.007423519 0.92995089
14 Ukraine 22,759,992 0.00492761 0.9348785
15 The Netherlands 22,483,232 0.004867691 0.939746191
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16 Uruguay 20,859,452 0.004516137 0.944262328

17 Thailand 20,416,500 0.004420237 0.948682565
18 Germany 20,021,254 0.004334665 0.95301723
19 Russian Federation 19,123,316 0.004140258 0.957157488
20 Paraguay 18,212,046 0.003942965 0.961100454
21 Denmark 13,040,204 0.002823245 0.963923699
22 Spain 12,488,372 0.002703772 0.966627471
23 Oman 12,141,989 0.002628779 0.96925625
24 Fmr Sudan 11,337,211 0.002454542 0.971710792
25 Italy 11,286,404 0.002443542 0.974154334
26 Ireland 10,098,539 0.002186366 0.976340699
27 South Africa 93,64,673 0.002027481 0.978368181
28 Belgium 8,386,351 0.001815671 0.980183852
29 Bosnia Herzegovina 7,856,182 0.001700888 0.98188474
30 Turkey 7,662,172 0.001658884 0.983543625
31 Canada 6,234,597 0.00134981 0.984893435
32 Jordan 6,151,513 0.001331822 0.986225257
33 Sudan 5,736,948 0.001242067 0.987467324
34 Belarus 5,378,747 0.001164516 0.98863184
35 Romania 5,136,798 0.001112133 0.989743973
36 Somalia 5,007,780 0.0010842 0.990828173
37 Kenya 4,859,547 0.001052107 0.99188028
38 Portugal 3,936,862 0.000852343 0.992732623
39 Austria 2,713,110 0.000587397 0.99332002
40 Greece 2,360,938 0.000511151 0.993831171
41 Malaysia 2,304,816 0.000499 0.994330171
42 UK 2,290,255 0.000495847 0.994826018
43 Egypt 2,150,005 0.000465483 0.995291501
44 Kuwait 1,738,093 0.000376303 0.995667804
45 Iran 1,499,928 0.000324739 0.995992543
46 Colombia 1,379,918 0.000298757 0.996291299
Table II. 47 Czechia 1,262,402 0.000273314 0.996564613
List of top 50 48 United Rep. of Tanzania 1,196,656 0.00025908 0.996823693
exporters of halal meat 49 Viet Nam 1,121,265 0.000242757 0.997066451
to selected 20 OIC 50 Singapore 993,609 0.000215119 0.99728157
members (2002–2016) Source: Authors’ calculations based upon data from comtrade.un.org

Hanbali, Maliki or Shia), respectively. These dummies take the value of 1 if both trading
partners are OIC members, share the adjacent boarder, share the same official language,
importing country holds the GATT/WTO membership and follow a similar school of thought.
If neither or only one trading partner meets this requirement, then the dummy value is 0.
 4. Impact analysis Jurisprudence
The income “Y,” population size “POP” and livestock “L” are compelling forces to enhance and demand
trade. Therefore, it is expected that their coefficients will be positive “α1, α2, α5 W 0.” The real for halal meat
effective exchange rate (EXC) describes the value, which is paid by a domestic consumer for
the imported products. An increase in EXC will make halal meat expensive for the importing
country and hence, it is hypothesized that its coefficient will be negative – that is, “α4 o0.”
Price level “P” and distance “D” are repelling forces to restrict trade. Thus, their coefficients 1621
are expected to be negative – that is, “α3, α6 o0.” OIC membership, boarder adjacency and
common language of the trading partners serve as a reduction in trade costs. So, it is
hypothesized that “α7, α8, α9 W 0.” Due to a rise in institutional standing, GATT/WTO
agreements have caused a substantial increase in bilateral trade for their member countries.
Therefore, it can be expected that the coefficient is positive, i.e. “α10 W 0.” A “SOT” dummy is
incorporated to capture the effect of the conflicting shariah rulings about halal meat across the
five major Muslims SOTs (explained above). It is anticipated that countries with similar SOTs
would tend to trade more among themselves – that is, “α11 W 0.”
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This paper used annual data on the import demand for halal meat by the 20 selected OIC
members shown in Table I, but only for the 13-year period from 2002 to 2014. Data for some
crucial variables (like livestock) were not available for the last two years (2015 and 2016),
compelling to restrict the data set. The data are presented in a panel data format.
To estimate the gravity models, this paper included only those commodity codes of
Chapter 2 (HS 2002, HS 2007 and HS 2012) that correspond to halal meat. Five types of HS
codes (1992, 1997, 2002, 2007 and 2012) are available at comtrade.un.org. For this study,
only 2002, 2007 and 2012 were selected, since this allows to take into account the data from
2002 to 2014 (13 years). Chapter 2 of HS codes (meat and edible meat offal) includes all types
of halal and non-halal meat. However, in HS 2012, the codes represent halal meat only, as
shown in Table III.

HS 2012

0201 Name: meat and edible meat offal; meat of bovine animals, fresh or chilled
Description: meat of bovine animals, fresh or chilled
0202 Name: meat and edible meat offal; meat of bovine animals, frozen
Description: meat of bovine animals, frozen
0204 Name: meat and edible meat offal; meat of sheep or goats, fresh, chilled or frozen
Description: meat of sheep or goats, fresh, chilled or frozen
0207 Name: meat and edible offal of poultry; of the poultry of heading no. 0105 (i.e. fowls of the species
Gallus domesticus), fresh, chilled or frozen
Description: meat and edible offal, of the poultry of heading 01.05, fresh, chilled or frozen
020810 Name: meat and edible meat offal; other meat and edible meat offal, fresh, chilled or frozen
Description: of rabbits or hares
020860 Name: meat and edible meat offal; other meat and edible meat offal, fresh, chilled or frozen
Description: of camels and other camelids (Camelidae)
021020 Name: meat and edible meat offal; meat and edible meat offal, salted, in brine, dried or smoked; edible
flours and meals of meat or meat offal
Description: meat of bovine animals
21099 Name: meat and edible meat offal; meat and edible meat offal, salted, in brine, dried or smoked; edible
flours and meals of meat or meat offal, other than of primates, whales, dolphins, porpoises, manatees,
dugongs, seals, sea lions, walruses and reptiles (including snakes and turtles)
Description: other Table III.
20890 Name: meat and edible meat offal; other meat and edible meat offal, fresh, chilled or frozen Four- and six-digit
Description: other HS (2012) codes
Source: comtrade.un.org for halal meat
 BFJ Some differences exist between the HS 2002, HS 2007 and HS 2012 codes regarding halal
121,7 meat; further, this study identified some additional codes that represent halal meat in HS
2007 and HS 2002, but not in HS 2012. These are given in Table IV (other than those
specified in HS 2012, except 020860 is missing in HS 2007 and HS 2002).
Table V provides a detailed description of the variables included in this study.
The ordinary least square (OLS) technique was deemed appropriate for estimating the
1622 gravity equation applied over cross-sectional data. The use of OLS to estimate a log-linearized
gravity equation can produce significant biases in the results, due to the assumption of
constant variance. To estimate the gravity model under a panel data setup, researchers have
mainly focused on a random effect model) technique. But for valid results of generalized least
squares (GLS), “t” (time) must be substantially greater than “m” (number of panels). To cope
with this problem, panel corrected standard errors (PCSE) have been used, in which the OLS
estimation technique is employed with asymptotic standard errors, and these standard errors
are rectified for correlation between panels. The PCSE technique also allows “t” to be less than
or equal to “m.” In this study, different estimation techniques have been used, such as OLS,
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GLS (random effect) and PCSE, to estimate a static augmented gravity model.

5. Empirical results

ln X ijt ¼ a0 þa1 ln Y it þ a2 ln Ljt þa3 ln P jt þa4 ln EXCit þa5 ln POPit þa6 ln Dij

þa7 OICij þa8 Boarderij þa9 ComLangij þa10 GATTit þa11 SOTij þU ijt :

HS 2007 and HS 2002

020610 Name: edible offal of bovine animals, fresh/chilled

Description: of bovine animals, fresh or chilled
020621 Name: tongues of bovine animals, frozen
Description: tongues
020622 Name: livers of bovine animals, frozen
Table IV.
Six-digit HS (2002 and Description: livers
2007) codes for halal 020629 Name: edible offal of bovine animals (excl. tongues and livers), frozen
meat, other than those Description: other
specified in Table III Source: comtrade.un.org

Xijt The $ value of halal meat imports of importing country; comtrade.un.org

P Imported halal meat value in $/imported halal meat in kg; comtrade.un.org
L Number of animals in exporting country “j” that are the source of halal meat; data from FAOSTAT
EXC The real effective exchange rate in importing country; data from WDI
D Great-circle distance between main cities, in km; data from CEPII
POP Population size (in number) of the importer; data from CEPII
ComLang ¼ 1 if at least one language is spoken by more than 9% of the population in both countries; data
from CEPII
Boarder ¼ 1 if the countries are contiguous, boarder DUMMY; data from CEPII
GATT 1 ¼ importer is GATT/WTO member; data from CEPII
OIC ¼ 1 if both trading partners are members of OIC; data compiled by author
Table V. Y Per capita GNI of importer @ PPP in US$; data from WDI
List of variables used, SOT ¼ 1 if both trading partners are members of OIC and share the same school of thought; data
with description compiled by authors
 The estimation results are given in Table VI. Jurisprudence
Results of the PCSE technique reveal that almost all variables are significant with and demand
predicted signs, except the distance “D” and OIC membership, because the coefficient sign for halal meat
of these two is against the hypothesized sign. Gundogdu (2009) reveals that trade volumes
increase with the increase in the income of OIC members. Similarly, the estimation results
of this study reveal that 1 percent increase in the per capita GNI (@ PPP) of OIC member
countries would increase the halal meat import demand by 1.01 percent. Moreover, as the 1623
price of halal meat in the exporting country increases by 1 percent, the demand in the
importing OIC member country tends to decrease by 0.54 percent. So, it can be concluded
that the price elasticity of demand for halal meat in OIC countries is inelastic (e o 1), while
on the other hand, income demand is elastic (ƞ W 1). This also reveals that halal meat is a
normal good in OIC; its demand increases with the increase in per capita income and
decreases with the increase in price. The augmented model anticipates a 0.49 percent
increase in halal meat demand, if the livestock production level in the exporting country
increases by 1 percent, due to the increased export capacity. Although the effect of the real
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effective exchange rate (EXC) is statistically insignificant, sign of the coefficient is as

hypothesized. This demonstrates that the import demand of halal meat in OIC countries is
statistically irrelevant of the fluctuations in real effective exchange rate; however,
Gundogdu (2009) and Poon and Hooy (2013) analyzed that exchange rate fluctuations also
formulate OIC member’s foreign trade. Nevertheless, according to the estimation results of
this study, if importer’s currency depreciates by 1 percent, the halal meat import demand
will tend to decrease by 1.4 percent, due to the fact that after currency depreciation
imports will become more expensive for importers. The results also suggest that 1 percent
increase in importer’s population has a tendency to increase halal meat import demand by
0.58 percent.
Coefficient of “distance” is positive, which is against the predicted negative sign, but it
is significant. For traditional gravity models, there would be less volume of intra-OIC

PCSE (panel
Random effect corrected standard
OLS GLS errors)
Description of independent variables “lnXijt” is dependent variable

lnY Per capita GNI of importer @ PPP 1.015 (10.31)*** 0.973 (4.99)*** 1.015 (17.84)***
lnL Livestock production level in 0.494 (7.88)*** 0.662 (4.63)*** 0.494 (6.74)***
exporting country
lnP Price level of meat exports in −0.543 (4.74)*** −0.146 (1.60)* −0.543 (3.25)***
exporting country
lnEXC The real effective exchange rate in −1.464 (1.52) −0.819 (1.23) −1.464 (1.53)
importing country
lnPOP Population size in importing country 0.583 (7.34)*** 0.783 (5.18)*** 0.583 (8.30)***
lnD Distance (in km) between trading 0.327 (2.71)*** 0.164 (0.55) 0.327 (2.21)**
partners
OIC OIC membership dummy −1.514 (4.64)*** −1.297 (1.98)** −1.514 (6.28)***
Boarder Boarder adjacency dummy 0.877 (1.77)* 1.449 (1.27) 0.877 (4.02)***
ComLang Common language dummy 0.951 (2.97)*** 0.945 (1.27) 0.951 (5.41)***
GATT GATT/WTO membership dummy 0.059 (0.26) 0.358 (1.56) 0.059 (0.23)
SOT Dummy for similar School of 1.361 (2.26)** 2.731 (1.89)** 1.361 (3.90)***
Thoughts
_cons −10.489 (1.89) −19.537 (3.23)*** −10.489 (1.86)*
R2 0.23 0.23 Table VI.
n 1,027 1,027 1,027 Results of augmented
Notes: *,**,***Significant at 10, 5 and 1 percent levels, respectively gravity model
 BFJ trade – in all commodities – for greater distances, as analyzed by Ghani (2007) a
121,7 negative and significant coefficient for distance. But this study predicted a significant
and positive coefficient of distance variable for intra-OIC halal meat trade. Almost all
of the OIC members are adjacent to each other and they appear as a bunch over the map
of the world, while they mainly import halal meat from the USA, Argentina, Australia
and New Zealand; exporters located in other continents. The reason behind this is that
1624 the massive quantities of halal meat are produced and processed in non-OIC countries,
which are located far away from top OIC importers of halal meat. On the other hand,
neighboring OIC members of these top OIC importers are unable to meet their halal
meat demand.
In employed model, the coefficient of dummy variables is interpreted in a semi-log way,
by using the following formula:

%Dy ¼ 100  ½e4 b1:

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Although Ghani (2007) found a negative and insignificant impact of OIC membership over
intra-OIC trade (all commodities), a study conducted by Ismail and Mawar (2012) predicts a
positive but insignificant coefficient for OIC dummy. Furthermore, this study – specifically
for halal meat intra-OIC trade – predicts a negative and significant coefficient for OIC
dummy, which implies that the halal meat import demand would be 68 percent less; if the
importer and exporter both belong to OIC bloc, as 100×[e^(−1.151) −1] ¼ (−68.3). In
traditional gravity models, it is hypothesized that if the trading partners share the same
organization, their mutual trade would tend to increase; in contrast with what is predicted
for OIC members in this study. This is mainly because of the lack of trust and mutual
cooperativeness among OIC members, and inability to meet the halal meat demand. So, our
study concludes that OIC members are failing to achieve their basic aim of increased
intra-regional trade, this aim was added to OIC’s initial charter.
The positive and significant coefficient for border adjacency “Boarder,” and common
language “ComLang” reveals that OIC members tend to import more if; both trading
partners share the adjacent border, and similar language; holding other factors constant.
The common language of both trading partners invalidates the existing communication
barriers. Similarly, if both partners have a same geographical border then trade costs reduce
and they tend to enhance mutual trade as much as they can.
The coefficient of GATT dummy is although positive, it is insignificant. This shows that
intra-OIC halal meat trade relations are not affected by the membership of any third
organization. Furthermore, religiosity positively influences the attitudes toward the halal
products (Mukhtar and Mohsin, 2012). Breaking down religiosity into different SOTs, this
study suggests an increasing volume of halal meat import, if both of the exporting and
importing OIC members share a same dominating school of thought. More elaborately, if
both trading partners have a same dominating school of thought (i.e. value of SOT
dummy ¼ 1), provided that partners are the OIC members as well, halal meat imports will
tend to increase by 289 percent, almost three times larger.

6. Conclusion
An augmented trade gravity model has been employed in this paper to analyze the
determinants for demand for halal meat in the OIC bloc. This study includes several
economic, demographic and religious factors. On the import side, the income of the
importing country and its population size are the primary factors responsible for the halal
meat import demand. On the export side, the price level and the livestock production
level are the major drivers. OIC importers are paying extra costs if they are importing
halal meat from countries which are in non-adjacent continents. A common language, an
 adjacent boarder and a similar school of thought about halal meat stimulate trade Jurisprudence
flows, while OIC membership has a negative impact over halal meat import demand. and demand
The results show that trade of halal meat among OIC member countries is jeopardized if for halal meat
the two countries belong to a different school of thought about the treatment and handling
of halal meat.
The results of this study demonstrate that OIC members must cooperate among
themselves to build a common market for halal meat and thereby increase intra-OIC halal 1625
meat trade. They can achieve this by doing the following: set up a globally accepted,
single shariah standard for halal meat; sign preferential trade agreements with OIC
members to liberalize intra-OIC trade; and subsidize domestic livestock production and
meat processing units. OIC members can also reduce trade costs by importing halal meat
from adjacent OIC members. Several tariff and non-tariff barriers also restrict trade
among OIC members. Therefore, by reducing the negative impact of these barriers,
intra-OIC halal meat trade can be increased. The negative impact of OIC membership also
reveals that there is room for OIC members to enhance their intra-OIC halal meat trade by
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improving the quality and trust level, and by engaging in long-term trade agreements.
While it is almost impossible to suggest a common school of thought or common Islamic
jurisprudence for all Muslims of the world, this study nonetheless argues that one shariah
standard for halal meat – which is globally accepted by all Muslims – will improve trade of
this important commodity.

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1626

Corresponding author
Naved Ahmad can be contacted at: drnavedahmadnu@gmail.com
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