All Theses and Dissertations

Degree

Master of Science in Economics

Faculty / School

Faculty of Business Administration (FBA)

Department

Department of Economics

Date of Award

Spring 2018

Advisor

Dr. Naved Ahmad

Committee Member 1

Dr. Naved Ahmad

Project Type

Thesis

Access Type

Restricted Access

Pages

ix, 52

Abstract

This study tries to explore the factors that are responsible to derive the import demand of Halal meat in OIC countries by employing a regional trade introversion index and three forms (simple, augmented, and dynamic) of the trade gravity model. This analysis uses data of Halal meat (chapter 02 of HS codes, excluding pig and other Haram meat) from 2002 to 2014. The estimation technique adopted in this study is PCSE (Panel Corrected Standard Errors). The computed values of regional trade introversion index show that OIC countries are continuously losing intra-OIC trade of Halal meat. And with the passage of time OIC members tend to import more and more of Halal meat from nonOIC members. Our dynamic gravity model fits best to explain the variation in Halal meat import demand by OIC bloc. Our results reveal that; per capita income and population size of the importing country, and livestock production level in exporting country are the primary drivers of the Halal meat import demand and their positive coefficients are highly statistically significant at 1%; while, price of the Halal meat in exporting country and official exchange rate of importing country negatively impact the import flow of Halal meat to OIC members. Moreover, the results categorize Halal meat as a normal good (not a luxury) for OIC members with price elasticity (Ed = 0.15) and income elasticity (Ey = 0.16). Furthermore, OIC members import relatively more quantities of Halal meat from distant countries than from adjacent countries, suggesting negative coefficient for "distance" variable, which is against the theory of the traditional trade gravity model. "OIC" and "GATT" membership is not contributing to enhance Halal meat import of OIC bloc, and OIC members are yet away from the goal of increased intra-OIC trade. Holding other factors constant; common language, border adjacency, and similarity in school of thoughts are also the factors that enhance import of Halal meat. Developing a common Halal meat market and one Halal certification body under OIC, can enhance intra-OIC Halal meat trade. Moreover, reducing tariff and non-tariff barriers among OIC members, improving livestock production level, creating buyers' and suppliers' trade and trust relations, and promoting long-term trade agreements among OIC members can help OIC members to lead or at least govern global Halal meat markets, and to increase intraOIC trade intensity in Halal meat and all other commodities.

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