Government introduced the Broad-based Black Economic Empowerment Act, No. 53
of 2003 and the Broad-based Black Economic Empowerment Codes of Good Practice
(‘the Codes’) in 2007 to address the economic inequalities in South Africa by
incentivising companies to include black people in economic activities. These
incentives relate to implementation of preferential procurement, which is meant to
favour companies that are BEE-compliant.
Based on the literature and government’s intention with BEE policies, an assumption
developed that companies with greater BEE compliance, which is measured through
a BEE scorecard as per the Codes, would perform better in terms of market share
through their revenue and in terms of profits. The main objective of this study was to
carry out an in-depth analysis of the relationship between BEE scores and revenue
growth and profitability of JSE-listed companies. This was done to determine whether
the efforts by government of incentivising companies to be more BEE compliant are
effective.
This study was conducted as a two-part model consisting of regression analysis and ttest
to determine whether there is a relationship between BEE scores and revenue and
profitability. The regression analysis focused on the top 100 most black-empowered
companies. The t-test was a comparison of two data sets, which consisted of companies in the top 100 most black-empowered companies and those that do no fall
among the top 100 most black-empowered companies.
The results showed that, at the time of this research, there were no significant
relationships between BEE scores and revenue and profitability. The analysis of the
research findings collectively demonstrated that for both the tests (regression and ttest),
the relationship between revenue and profitability could not be established.
Hence, the results postulate that BEE compliance does not produce the desired results
for the companies, which can be translated into better profitability and market share. / Financial Accounting / M. Phil. (Accounting Sciences)
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:unisa/oai:uir.unisa.ac.za:10500/23685 |
| Date | 07 1900 |
| Creators | Mokgobinyane, Moshupi Vincent |
| Contributors | Van Rooyen, A.A., Wingard, H.C. |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Dissertation |
| Format | 1 online resource (ix, 107 leaves) : illustrations, some color |
Page generated in 0.0016 seconds