Identification of Factors Driving the Implementation of Halal Certification in MSMEs Indonesia

Abstract

The halal industry has drawn particular attention as one of the most exciting and promising business to be explored and developed. Indonesia as the largest moslem country has a huge chance to be the center of halal industry. The government then make a particular law about halal food and one of the important point is to make sure Micro Small and Medium Enterprises have a halal certification. But there is very few research concerning about factors affecting the MSMEs willingness to implement this law. This phenomenon needs to be analyzed more deeply with tested variables related to human behavior and perception. This study investigates determinants of MSMEs intention and behavior to have halal certification in a framework that incorporates Extended theory of planned behavior (TPB) such as subjective norms, perceived behavioral control, religiosity, knowledge about sharia law, trust regarded to the halal status of products, and awareness. The survey method was applied to 320 respondents and then analysis in this study was carried out using Structural Equation Modeling (SEM), The result of this research is that there are 5 significant correlations between variables, namely subjective norms, halal awareness and attidude have a significant effect on Intention to Use. This study also found that the Perceived Usefulness, Perceived Effectiveness and Individual concern factors had no significant effect. This result highlights the importance of increasing the easeness for MSMEs to have halal certification and to boost halal food industry in Indonesia