Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market
This study examines the relationship between corporate governance attributes and technical and scale efficiencies of the global Takaful Insurance operators. Using alternative estimators for efficiency, our results show that Takaful operators are inefficient suggesting the presence of widespread mana...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2018
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| Online Access: | http://psasir.upm.edu.my/id/eprint/72852/ http://psasir.upm.edu.my/id/eprint/72852/1/Governance%20mechanisms%20and%20efficiency.pdf |
| _version_ | 1848857218717319168 |
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| author | Karbhari, Yusuf Muye, Ibrahim Sheikh Hassan, Ahmad Fahmi Elnahass, Marwa |
| author_facet | Karbhari, Yusuf Muye, Ibrahim Sheikh Hassan, Ahmad Fahmi Elnahass, Marwa |
| author_sort | Karbhari, Yusuf |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This study examines the relationship between corporate governance attributes and technical and scale efficiencies of the global Takaful Insurance operators. Using alternative estimators for efficiency, our results show that Takaful operators are inefficient suggesting the presence of widespread managerial lethargy and operational inefficiency. Additional analyses indicate that non-executive directors, audit committees, and product diversification do not improve technical efficiency. Rather, audit committees and regulatory jurisdiction tends to reduce scale efficiency. We also find that CEO/chair duality, board size, organizational age, regulatory jurisdiction and firm size have a positive relationship with technical efficiency. We further report that non-executive directors, Shari’ah board, product diversification and institutional ownership improve scale efficiency. In particular, the study provides new and extended regional evidence on the efficiency of the Takaful industry in the Middle East North Africa (MENA) and the Southeast East Asian (ASEAN) region. Our findings provide important policy implications for investors, regulators, and other market participants. |
| first_indexed | 2025-11-15T11:54:04Z |
| format | Article |
| id | upm-72852 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T11:54:04Z |
| publishDate | 2018 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-728522021-03-17T02:02:05Z http://psasir.upm.edu.my/id/eprint/72852/ Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market Karbhari, Yusuf Muye, Ibrahim Sheikh Hassan, Ahmad Fahmi Elnahass, Marwa This study examines the relationship between corporate governance attributes and technical and scale efficiencies of the global Takaful Insurance operators. Using alternative estimators for efficiency, our results show that Takaful operators are inefficient suggesting the presence of widespread managerial lethargy and operational inefficiency. Additional analyses indicate that non-executive directors, audit committees, and product diversification do not improve technical efficiency. Rather, audit committees and regulatory jurisdiction tends to reduce scale efficiency. We also find that CEO/chair duality, board size, organizational age, regulatory jurisdiction and firm size have a positive relationship with technical efficiency. We further report that non-executive directors, Shari’ah board, product diversification and institutional ownership improve scale efficiency. In particular, the study provides new and extended regional evidence on the efficiency of the Takaful industry in the Middle East North Africa (MENA) and the Southeast East Asian (ASEAN) region. Our findings provide important policy implications for investors, regulators, and other market participants. Elsevier 2018-09 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/72852/1/Governance%20mechanisms%20and%20efficiency.pdf Karbhari, Yusuf and Muye, Ibrahim and Sheikh Hassan, Ahmad Fahmi and Elnahass, Marwa (2018) Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market. Journal of International Financial Markets Institutions & Money, 56. 71 - 92. ISSN 1042-4431 https://www.sciencedirect.com/science/article/pii/S1042443117305619 10.1016/j.intfin.2018.02.017 |
| spellingShingle | Karbhari, Yusuf Muye, Ibrahim Sheikh Hassan, Ahmad Fahmi Elnahass, Marwa Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market |
| title | Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market |
| title_full | Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market |
| title_fullStr | Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market |
| title_full_unstemmed | Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market |
| title_short | Governance mechanisms and efficiency: evidence from an alternative insurance (Takaful) market |
| title_sort | governance mechanisms and efficiency: evidence from an alternative insurance (takaful) market |
| url | http://psasir.upm.edu.my/id/eprint/72852/ http://psasir.upm.edu.my/id/eprint/72852/ http://psasir.upm.edu.my/id/eprint/72852/ http://psasir.upm.edu.my/id/eprint/72852/1/Governance%20mechanisms%20and%20efficiency.pdf |