Value Chain as a Mediating Mechanism in Developing Sharia Cooperatives: Evidence from Community Empowerment Programs in Indonesia

Teuku Fajar Shadiq; Hani Hasanah; Dwi Sri Dani Afriza

doi:10.59261/inkubis.v8i3.459

Authors

Teuku Fajar Shadiq Universitas Islam Syekh-Yusuf
Hani Hasanah Universitas Islam Syekh-Yusuf
Dwi Sri Dani Afriza Universitas Islam Syekh-Yusuf

DOI:

https://doi.org/10.59261/inkubis.v8i3.459

Keywords:

Sharia Cooperative Development, Value Chain Integration, Community Empowerment, Government Support, CB-SEM

Abstract

Background: Sharia cooperatives play a strategic role in promoting inclusive economic development and community empowerment in Indonesia. However, existing empowerment programs have largely emphasized institutional strengthening and financial support while paying limited attention to value chain integration as a mechanism for enhancing cooperative sustainability.

Objective: This study examines the direct structural relationships of Government Support, Community Empowerment, Management Support, Partnership, and Value Chain Integration with Sharia Cooperative Development, and evaluates the indirect Community Empowerment → Value Chain Integration → Sharia Cooperative Development pathway.

Methods: A quantitative explanatory approach was employed using a cross-sectional survey of 392 household heads participating in community empowerment programs in Central Maluku Regency, Indonesia. Data were analyzed using covariance-based Structural Equation Modeling (CB-SEM) with AMOS, consistent with the reported CFA, fit indices, Critical Ratio, and AMOS regression-weight outputs.

Results: Government Support, Community Empowerment, and Value Chain Integration show statistically significant structural associations with Sharia Cooperative Development, whereas Management Support and Partnership do not. An indirect effect of Community Empowerment through Value Chain Integration is observed (0.456), but statistical mediation significance is not established because bootstrap confidence intervals are not reported.

Conclusion: study extends the application of Value Chain Theory to Sharia cooperatives and offers a cautious structural-association perspective for community-empowerment strategy. The cross-sectional design, model-fit inconsistencies, and incomplete indirect-effect testing preclude strong causal or confirmed-mediation claims.

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