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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. Petri Ferreira & Charl de Villiers, 2011. "The association between South African listed companies' BEE scores and market performance: An introductory study," Meditari Accountancy Research, Emerald Group Publishing, vol. 19(1), pages 22-38, October.

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