Linking halal certificate and micro, small and medium enterprises (MSMES) performance in Indonesia

Purpose This study aims to analyze the relationship between halal certification (HC) and micro, small and medium enterprises’ (MSMEs) performance. Design/methodology/approach This study involved 925 MSMEs in food and beverage, fashion, manufacturing, retail, services and travel agents in 32 Indonesian provinces. The model used was based on the resource-based view theory with the partial least squares structural equation modeling as the data processing tool. Findings The study proved that HC positively relates to operational performance and financial performance. The subsequent operational performance also has a positive effect on financial performance. Additionally, operational performance mediates the relationship between HC and financial performance. This signifies that HC implementation positively influences MSMEs’ performance. Practical implications By linking HC and MSMEs’ performance, managers may be aware of the significant role of HC in improving operational and financial performance. It would entice more MSMEs to be halal-certified, which opens up an opportunity for a lucrative halal industry. It also empirically justifies that a religion-based certification can influence MSMEs’ performance. Originality/value Although numerous studies have concentrated on well-established HCs, the growing Muslim population, rising demand for HC and the lucrative MSMEs product market have raised the attention of HC research among academicians and practitioners. This research can highlight the importance of implementing HC among MSMEs as it could lead to superior business outcomes.