This study investigates international equity joint ventures (IJVs) and South African partner firm value creation at formation. In addition, it tests whether four contentious formation characteristics, namely, the geographical location of the IJV partner, the level of economic development in the IJV partner’s home country, the level of equity held by the South African firm and the industry of the South African firm, can explain when South African IJVs are value enhancing and when they are value diminishing. IJVs are a popular business mode and an important channel for infrastructure and skills investment in developing countries. However, despite their popularity and potential social benefits, these IJVs are predominantly created by the decisions of private firms to collaborate with foreign firms and governments. Consequently the preservation and development of the IJV investment channel is dependent on the encouragement of private firm IJV participation. It is at uncovering potential tools to encourage IJV participation by South African firms that IJV firm value creation becomes important because it stands as a motivator for South African firms’ involvement in IJVs. Existing literature on IJVs and partner firm value has presented conflicting evidence with support for the views that they are value enhancing, value diminishing or of no immediate consequence to their partners’ firm value. Consequently, previous research offers limited firm value support for IJVs. For South African firms considering joint ventures and national policy makers determined to promote IJVs there is a need for an investigation of South African partner IJV firm value effects. Moreover, it is also necessary to test potential explanatory variables that may help to explain when the IJVs are value enhancing and when they are not as this will inform IJV contract negotiations and how limited national government resources are used to promote IJVs. In order to assess firm value creation for South African firms this study performed event studies on IJV formation announcements from 1998 to 2011 using daily share returns from the Johannesburg Securities Exchange taking care to incorporate recent developments in the event study methodology. The study found that while the market responds to IJV announcements, its responses do not, on average, reflect that IJVs are firm value enhancing for their South African partners at formation. This stands in contrast to considerable empirical literature and IJV firm value creation theory. In addition, factoring in formation characteristics, argued to potentially help explain cases of value creation and destruction from IJVs, provided limited explanation for positive and negative wealth effectsfor South African firms entering IJVs. This result has important value for IJV participants, national economic policy makers and IJV researchers. For IJV participants and national policy makers, the results caution unfettered entry/support for IJVs and challenge the role of equity distribution in determining the value of the IJV to its partner firms. For IJV researchers, the results present new evidence questioning IJV firm value creation at formation and provide a potential explanation for the conflict in previous IJV research. The study makes four key contributions to the existing knowledge of IJV firm value creation. Firstly, it assesses IJV wealth effects for the hitherto untested South African IJVs. Secondly, in doing so it adds a new data set (South African IJVs) to the current IJV literature. Thirdly, in reviewing the literature on IJV firm value creation the study presents a disaggregated model of IJV firm value creation from which to develop IJV research and potentially solve the persistent conflict in empirical results on IJV partner wealth effects. Finally, it informs future South African IJV agreements by uncovering factors that influence and do not influence partner wealth effects for South African firms.

In this paper, I have attempted to highlight the problems that face investors, both black and white, in South Africa, especially in the light of the effects of the new legislation promulgated after apartheid was abolished. The legislation with which I am most concerned, is the legislation which was promulgated to promote the entry of blacks into the South African economy. In chapter one, I deal with the concept of empowerment from the constitutional view point and the problem of its definition. I also discuss out the relevant new legislation that in my argument I believe impacts on corporate activity and then deal with the distinction between an "arrangement" within its ordinary meaning in corporate law distinct from that as defined in the in the Companies Act 61 of 1973. In chapter two, I deal with the dangers facing an individual investor, the benefits of incorporation, the problem of the existence of money revolving schemes, and the effects of a lack of education amongst previously disadvantaged investors. In chapter three, I deal with joint ventures, their benefits, the effect of the Competition Act 81 of 1998 on joint and potential areas of conflict between black and white partners. Certain aspects of fraudulent and negligent conduct of directors are examined. In Chapter four, I deal with the methods of executing mergers and acquisition in relation to empowerment companies, their advantages and disadvantages, certain procedures necessary for the protection of investors like due diligence inquiries, the protection offered by the present company legislation and the common law and criticisms of the courts to protect shareholders. I look at a case study and special considerations in mergers and acquisitions. In chapter five, I look at the problem of capital in empowerment companies, the various methods that have been used to raise capital, and the loopholes in the law that affect some of these arrangements. I have focused specifically on special purpose vehicles and buyouts. In chapter six, I deal with the impact of government action and government policy on empowerment and I have compared this with what has happened in other countries. I conclude by recommending that the Black Empowerment Commission should be given teeth to take corrective measure towards empowerment. / Thesis (LL.M.)-University of Natal, Durban, 2001.

The new South Africa has an amazing economic growth that creates a significant opportunity for international companies to start their businesses in South Africa. For those companies which are interested in the South African market, it is very important for them to understand the factors that influence their entry-mode selection. The objective of this study is to determine the main factors that have an impact on the decision of a foreign business to enter South Africa. To achieve this objective, the researcher used an integrated study method, as follows: {u10007A} A systematic review of the popular entry-modes and the main factors influencing the entry-mode selection, sourced from the relevant literature. In addition, South African business was also introduced. {u10007A} Based on the factors related in the literature, an empirical survey was completed by those foreign companies who had already successfully entered into South Africa, in order to figure out the rank importance of these factors. With an integrated study of literature and empirical research, the rank importance of factors that have an impact on the foreign business entry-mode selection in South Africa is as follows: 1. Firm’s product 2. Control level of entry-mode 3. Ownership of entry 4. Resource commitment of entry-mode 5. Political factor 6. Firm’s objective 7. Technological factors 8. Economic factors 9. Firm’s experience in international marketing 10. Firm’s size 11. Dissemination risk of entry-mode 12. Socio-cultural factors 13. Flexibility of entry-mode Key terms: International market entry-mode South African business environment.

The political history of South Africa, especially that of the apartheid years, has affected the structuring and functioning of business in the country profoundly. In general, White business is highly developed and formal, with access to financial and infrastructural support. Black business is often subsistence-based, informal and struggles for access to support mechanisms. These structural inequities have had a depressing impact on the economy that will continue if they are not resolved. Following the 1994 elections, policies and legislation have been introduced aimed at redressing structural imbalances. There is thus both a political and an economic imperative to bridge the gaps that have arisen between Black and White business. The study proposes Black/White joint ventures as a mechanism to this end. The history of Black/White relationships means that these enterprises are likely to face many problems. A model has been developed through the study for the formulation, structuring and operation of Black/White joint ventures that takes into account the factors that are likely to impact on these ventures and affect their success potential. The process of applying the model in practice is directed towards results that are not prejudiced by the background of the parties to the venture. The study expands the concept of joint ventures within the South African context to incorporate initiatives along a continuum ranging from extensions to employment to full joint ventures. Depending on its nature and objectives, a venture may be placed and remain at any stage along the continuum, or may progress along it. Case studies of Black/White joint ventures were investigated in depth and analysed in terms of the application of the model, in order to determine the relevance of the model. In all cases, the success or failure of the venture under scrutiny could be ascribed to the way in which the presence of various elements identified as being components of the model had been accommodated in practice within the venture. The use of the model when applied to formulating, structuring and operating a Black/White joint venture can contribute to its success potential. / Business Management / DBL

The political history of South Africa, especially that of the apartheid years, has affected the structuring and functioning of business in the country profoundly. In general, White business is highly developed and formal, with access to financial and infrastructural support. Black business is often subsistence-based, informal and struggles for access to support mechanisms. These structural inequities have had a depressing impact on the economy that will continue if they are not resolved. Following the 1994 elections, policies and legislation have been introduced aimed at redressing structural imbalances. There is thus both a political and an economic imperative to bridge the gaps that have arisen between Black and White business. The study proposes Black/White joint ventures as a mechanism to this end. The history of Black/White relationships means that these enterprises are likely to face many problems. A model has been developed through the study for the formulation, structuring and operation of Black/White joint ventures that takes into account the factors that are likely to impact on these ventures and affect their success potential. The process of applying the model in practice is directed towards results that are not prejudiced by the background of the parties to the venture. The study expands the concept of joint ventures within the South African context to incorporate initiatives along a continuum ranging from extensions to employment to full joint ventures. Depending on its nature and objectives, a venture may be placed and remain at any stage along the continuum, or may progress along it. Case studies of Black/White joint ventures were investigated in depth and analysed in terms of the application of the model, in order to determine the relevance of the model. In all cases, the success or failure of the venture under scrutiny could be ascribed to the way in which the presence of various elements identified as being components of the model had been accommodated in practice within the venture. The use of the model when applied to formulating, structuring and operating a Black/White joint venture can contribute to its success potential. / Business Management / DBL