Shariah board and takaful performance: mediating role of corporate social responsibility

Nourhen Sallemi () and Ghazi Zouari ()
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Nourhen Sallemi: University of Sfax
Ghazi Zouari: University of Sfax

International Review of Economics, 2024, vol. 71, issue 2, No 3, 175-204

Abstract: Abstract This study aims to investigate the impact of Shariah board characteristics (Shariah board size, cross-membership, qualification, and reputation) on the performance of takaful insurance providers of distinguishable Muamalah contracts (wakalah and mixt), mediated by corporate social responsibility. Our sample covers 30 Takaful insurances divided into two subsamples: 18 insurance wakalah contracts offered in Southeast Asia (SEA) and 12 insurance mixte contracts offered in GCC over the period 2010–2020. We used the PLSPM method for data analysis. Corporate social responsibility (CSR) activities contribute to the success of takaful insurance. In fact, CSR has a partial mediating effect on the relationship between Shariah board size, qualification, and Takaful performance based on SEA countries and GCC. Furthermore, CSR has a full mediating effect on the relationship between cross-membership and takaful performance in SEA countries and a partial mediating effect on the relationship between cross-membership and takaful performance in GCC countries. Moreover, CSR has a partial mediating effect on the relationship between reputation and Takaful performance in both SEA and GCC countries. This study highlights that CSR is a source of efficiency that enhances Takaful’s performance. Regulators should appreciate this procedure for the formulation of suitable and useful ways to efficiently supervise the operations of Takaful insurance.

Keywords: Shariah board; Takaful performance; Muamalat contract; Corporate social responsibility; PLSPM (search for similar items in EconPapers)
JEL-codes: G22 G3 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s12232-023-00439-2

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