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Black economic empowerment ownership initiatives: a Johannesburg Stock Exchange perspective

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  • Kurt Sartorius
  • Gerhard Botha

Abstract

The success of black economic empowerment (BEE) is still not clear. The objective of this paper is to assess the results of BEE equity transfers and contribute to the development of a framework to assess the cost/benefit of transferring equity in this fashion. BEE data from 62 companies listed on the Johannesburg Stock Exchange were analysed using a qualitative methodology and descriptive analysis. The results indicate that respondent companies have transferred less than 25 per cent equity to BEE partners, that a majority of firms appear to support the social objectives of BEE, that external partners appear to best promote shareholder wealth, and that the primary source of funding for BEE equity transactions is third-party funding or the respondent companies themselves. Finally, the Malaysian experience of affirmative action offers some useful lessons for South Africa's BEE programme, as well as some valuable insights into the economics of wealth redistribution.

Suggested Citation

  • Kurt Sartorius & Gerhard Botha, 2008. "Black economic empowerment ownership initiatives: a Johannesburg Stock Exchange perspective," Development Southern Africa, Taylor & Francis Journals, vol. 25(4), pages 437-453.
    • Handle: RePEc:taf:deveza:v:25:y:2008:i:4:p:437-453
    DOI: 10.1080/03768350802318530
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    References listed on IDEAS

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    1. Rulof Burger & Ronelle Burger & Servaas van der Berg, 2004. "Emergent Black Affluence and Social Mobility in Post-Apartheid South Africa," Working Papers 04087, University of Cape Town, Development Policy Research Unit.
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    Cited by:

    1. Lerato Shai & Comfort Molefinyana & Geo Quinot, 2019. "Public Procurement in the Context of Broad-Based Black Economic Empowerment (BBBEE) in South Africa—Lessons Learned for Sustainable Public Procurement," Sustainability, MDPI, vol. 11(24), pages 1-27, December.
    2. Bongani Munkuli & Renee Horne, 2018. "Financial Markets Value Reputation for Corporate Social Responsibility (CSR) – A Study of the South African Mining Sector," Africagrowth Agenda, Africagrowth Institute, vol. 15(2), pages 17-22.
    3. Hilary Tinotenda Muguto & Lorraine Rupande & Paul-Francois Muzindutsi, 2019. "Investor sentiment and foreign financial flows: Evidence from South Africa," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 37(2), pages 473-498.
    4. Adeyanju Adebiyi Sunday & Farai Kwenda, 2021. "Corporate Ownership Structure and Firm Value: Empirical Evidence of JSE-Listed Firms, South Africa," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 9(2), pages 89-106.
    5. Ricardo Hausmann & Tim O'Brien & Andres Fortunato & Alexia Lochmann & Kishan Shah & Lucila Venturi & Sheyla Enciso & Ekaterina Vashkinskaya & Ketan Ahuja & Bailey Klinger & Federico Sturzenegger & Mar, 2023. "Growth Through Inclusion in South Africa," CID Working Papers 434, Center for International Development at Harvard University.

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