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The Effect of Broad-Based Black Economic Empowerment Laws (B-BBEE) on Mutual Funds’ Performance in South Africa

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  • Nixon S. Chekenya
  • Heinz Eckart Klingelhöfer

    (Tshwane University of Technology)

Abstract

While a growing body of literature examines the link between Broad- Based Black Economic Empowerment Laws (B-BBEE, popularly referred to as BEE) and firm level as well as national outcomes, still less is known about systematic differences in performance between B-BBEE-affiliated and non-B-BBEE affiliated groups. Hence, employing a panel of 3,320 B-BBEE-affiliated and 3,329 non-BBBEE affiliated funds for the period 2004 to 2016, we investigated the effect of compliance (non-compliance) with the indigenization laws on each firm’s performance and uncovered investors’ attitude towards B-BBEE laws. The study’s results challenge conventional wisdom that indigenisation laws affect business operations in South Africa. The idea, widely held, that B-BBEE policy is a block to foreign investment is without statistical backing.

Suggested Citation

  • Nixon S. Chekenya & Heinz Eckart Klingelhöfer, 2021. "The Effect of Broad-Based Black Economic Empowerment Laws (B-BBEE) on Mutual Funds’ Performance in South Africa," Africagrowth Agenda, Africagrowth Institute, vol. 18(4), pages 14-17.
    • Handle: RePEc:afj:journ2:v:18:y:2021:i:4:p:14-17
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-afgrow_v18_n4_a3
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