The effects of Islamic financial literacy on entrepreneurial venture performance and halal tourism ecosystem development

Purpose This study aims to investigate the role of Islamic financial literacy and halal finance in the development of ventures in the halal tourism sector. Design/methodology/approach Respondents of this study were business actors in the halal tourism ecosystem, as were 152 entrepreneurs. PLS-SEM was used to analyze the data. Findings Marketing communication, religiosity and Islamic financial skill are determining factors in achieving halal finance inclusion. The results of this study also found that the components of Islamic financial literacy, especially Islamic financial awareness and Islamic financial skills, have a positive and significant effect on the development of venture. Halal finance also has a positive and significant effect on venture development in the halal tourism sector. Research limitations/implications The sample for this study was only taken from one country, the results could not be generalized to all of the countries. However, these results can be used as an illustration that halal finance has a real contribution in developing ventures in the halal tourism sector. Practical implications To establish a halal tourist ecosystem for long-term development, commercial actors must lend their full support. This study demonstrates that when ventures in the halal tourist ecosystem are backed by halal finance, such as Islamic banking and Islamic rural banks, they can thrive. As a result, a more accommodating approach from Islamic banking as halal finance is required to provide access to halal finance for venture in the halal tourism ecosystem. Originality/value This study integrates Islamic financial literacy, marketing communication, religiosity and Islamic financial inclusion. In the literature on venture development in the halal tourism sector, these variables have not been well integrated. In addition, this study was analyzed using RBV theory, institutional theory and human capital theory to provide deeper and broader insights, thus providing a different perspective on resources and capabilities towards competitive advantage and venture sustainability.