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South African Disinvestment: Causes And Effects

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  • BERNARD FEIGENBAUM
  • ANTON D. LOWENBERG

Abstract

Divestment pressure is one channel through which those interest groups opposing apartheid have attempted to induce U.S. firms to withdraw from South Africa. This paper investigates empirically the relationship between stockholder influence, disinvestment, and the behavior of South Africa‐active firms. The paper finds that if institutional investors hold a large proportion of a firm's shares, then that firm will be induced to participate in fair employment and social programs to benefit its black labor force. However, the same “socially responsible” firm is also more likely to disinvest—leaving a less progressive employer in its place.

Suggested Citation

  • Bernard Feigenbaum & Anton D. Lowenberg, 1988. "South African Disinvestment: Causes And Effects," Contemporary Economic Policy, Western Economic Association International, vol. 6(4), pages 105-117, October.
    • Handle: RePEc:bla:coecpo:v:6:y:1988:i:4:p:105-117
    DOI: 10.1111/j.1465-7287.1988.tb00550.x
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    References listed on IDEAS

    as
    1. Thomas W. Hazlett, 1988. "Economic Origins Of Apartheid," Contemporary Economic Policy, Western Economic Association International, vol. 6(4), pages 85-104, October.
    2. repec:bla:scandj:v:86:y:1984:i:1:p:68-83 is not listed on IDEAS
    3. William H. Kaempfer & Michael H. Moffett, 1988. "Impact Of Anti‐Apartheid Sanctions On South Africa: Some Trade And Financial Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 6(4), pages 118-129, October.
    4. Thomas O. Bayard & Joseph Pelzman & Jorge Perez‐Lopez, 1983. "Stakes and Risks in Economic Sanctions," The World Economy, Wiley Blackwell, vol. 6(1), pages 73-88, March.
    5. Haider Ali Khan, 1988. "Impact Of Trade Sanctions On South Africa: A Social Accounting Matrix Approach," Contemporary Economic Policy, Western Economic Association International, vol. 6(4), pages 130-140, October.
    6. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
    7. Margaret P. Doxey, 1980. "Economic Sanctions and International Enforcement," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-04335-4, October.
    8. repec:bla:kyklos:v:39:y:1986:i:3:p:377-96 is not listed on IDEAS
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    Cited by:

    1. William H. Kaempfer & Michael H. Moffett, 1988. "Impact Of Anti‐Apartheid Sanctions On South Africa: Some Trade And Financial Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 6(4), pages 118-129, October.
    2. Poitras, Geoffrey, 1994. "Shareholder wealth maximization, business ethics and social responsibility," MPRA Paper 113221, University Library of Munich, Germany.
    3. Judith F. Posnikoff, 1997. "Disinvestment From South Africa: They Did Well By Doing Good," Contemporary Economic Policy, Western Economic Association International, vol. 15(1), pages 76-86, January.

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