Does human development strengthen the impact of halal ecosystem, FDI and government effectiveness on GDP? Evidence from OIC countries

  • Pipit Amanda 
    Magister Ilmu Ekonomi, Fakultas Ekonomi dan Bisnis, Universitas Brawijaya
    Indonesia
  • Sri Muljaningsih
    Program Studi Magister Ekonomi, Fakultas Ekonomi dan Bisnis, Universitas Brawijaya
    Indonesia
  • Silvi Asna Prestianawati
    Program Studi Magister Ilmu Ekonomi, Fakultas Ekonomi dan Bisnis, Universitas Brawijaya
    Indonesia

Abstract

Economic growth in Organization of Islamic Cooperation (OIC) member states remains below its potential despite the region's large population and resource base. This study examines the effects of the halal economic ecosystem, foreign direct investment (FDI), and government effectiveness on GDP and evaluates the moderating role of the Human Development Index (HDI). A quantitative panel-data approach was applied to 10 OIC countries during 2015–2023 using a Fixed Effects Model and Moderated Regression Analysis (MRA). The results show that the halal economic ecosystem has a positive and significant effect on GDP, whereas FDI has no significant direct effect. Government effectiveness and HDI show significant negative direct coefficients. HDI weakens the effect of the halal economic ecosystem on GDP, does not significantly moderate the FDI–GDP relationship, and strengthens the effect of government effectiveness on GDP. These findings demonstrate that human development does not universally strengthen economic drivers; its moderating role depends on the alignment between human development and sector-specific productive capabilities. The study contributes empirical evidence on the conditional role of HDI in the economic growth framework of OIC countries.

Keywords
  • Halal economic ecosystem, Foreign direct investment, Government effectiveness, Human development index, GPD
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