Original Research

Effect of Black Economic Empowerment on profit and competitiveness of firms in South Africa

Ewert P.J. Kleynhans, Melinda C. Kruger
Acta Commercii | Vol 14, No 1 | a200 | DOI: https://doi.org/10.4102/ac.v14i1.200 | © 2014 Ewert P.J. Kleynhans, Melinda C. Kruger | This work is licensed under CC Attribution 4.0
Submitted: 08 May 2013 | Published: 17 July 2014

About the author(s)

Ewert P.J. Kleynhans, School of Economics, North-West University, Potchefstroom Campus, South Africa
Melinda C. Kruger, School of Economics, North-West University, Potchefstroom Campus, South Africa


Orientation: The key obstacle hindering optimal profitability levels and competitiveness in firms in South Africa is the application of labour legislation policies and tools aimed at narrowing the income gap between different racial groups and resolving inequality amongst a diverse workforce.

Research purpose: This article determined whether the implementation of a Black Economic Empowerment (BEE) policy by companies has a positive effect on their growth in terms of profits and competitiveness.

Motivation for the study: This study determined whether the implementation of BEE could be profitable for companies.

Research design, approach and method: A quantitative study was undertaken in order to find empirical evidence supporting the relation between high BEE Scores, profitability and competitiveness. The empirical investigation utilised regression analysis, correlations and other methods, based on data between January 2009 and December 2011. The BEE Scorecard was used to obtain BEE scores of the top 50 BEE companies. Thereafter, the top 50 companies’ financial information was gathered from the Johannesburg Securities Exchange.

Main findings: The implementation of BEE within companies has a positive effect on profitability, turnover and investment. Numerous factors have, however, been hindering,while other factors enhanced the success of BEE.

Practical/managerial implications: The findings encourage mangers to engage in BEE as it may facilitate higher profits and indicates where labour legislation could be improved.

Contribution/value-add: Value was added through new research determining the effects of BEE and labour legislation on profitability and competitiveness of firms on a micro-level.


BEE policy, firms, Black Economic Empowerment, micro-level, profits, competitiveness, efficiency, investment


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Crossref Citations

1. Reflecting on compliance with Broad-Based Black Economic Empowerment codes of good practice: Trends and suggestions
Jan A. Dreyer, Suzette Viviers, Nadia Mans-Kemp
South African Journal of Business Management  vol: 52  issue: 1  year: 2021  
doi: 10.4102/sajbm.v52i1.1963