Does Hospitality Drive Halal Tourism, or Vice Versa? Dynamic Panel Evidence from OIC and Non-OIC Destinations
DOI:
https://doi.org/10.21580/economica.2026.17.1.31182Keywords:
Bidirectional causality, Halal certification, Islamic hospitality, OIC Countries, Tourism-led growth hypothesisAbstract
This study examines the relationship among halal tourism, hospitality services, and Muslim-friendly travel experiences across the selected sample of OIC and non-OIC countries from 2010 to 2025, incorporating the latest observations for 2025. Using a quantitative design, the analysis applies Dynamic Panel Vector Autoregression to identify reciprocal causal relationships and System Generalized Method of Moments estimation to address endogeneity and test robustness based on first-differenced stationary variables. The PVAR results indicate bidirectional causality between halal tourism and both hospitality services and Muslim-friendly travel experiences. In addition, the System GMM estimates show that hospitality services significantly improve halal tourism (β = 0.274, p = 0.003), while Muslim-friendly travel experiences produce an even larger impact (β = 0.351, p < 0.001). The model also satisfies diagnostic tests, as the Hansen J-test confirms instrument validity (p = 0.290) and no second-order serial correlation is detected (p > 0.10). Taken together, these findings reinforce the tourism-led growth hypothesis and endogenous growth theory by demonstrating dynamic links among these sectors. Thus, OIC and non-OIC state authorities must defend Islamic-oriented hospitality, devise Muslim/halal-friendly tourism standards and branding within a framework of destination inclusivity in balance with real and sustainable halal certification.
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