Corporate social responsibility: The performance of black economic empowerment (BEE) companies in a developing country after the global financial crisis

Abstract

The aim of this study is to measure the medium term financial performance of companies who had previously shown their corporate social responsibility (CSR) by engaging in black economic empowerment (BEE) in a developing country. Performance was measured before, during and after the recent global financial crisis (GFC) that affected global markets, and more specifically the Johannesburg Stock Exchange (JSE), the only stock exchange in South Africa. Whereas a previous study tried to answer the question of whether the specific announcements of BEE transactions by listed companies on average increase shareholder wealth, this study focuses on the medium term performance of these companies. The focus is on the performance between 2 January, 2007 and 30 September, 2009 of companies who had previously engaged in BEE transactions during the period January 2002 to July 2006. The average performance of these companies is compared with the performance of the market index before, during and after the financial crisis. The results of this study could be important for all developing countries that need to address social inequities. Key words: Black economic empowerment (BEE), corporate social responsibility (CSR), corporate social performance (CSP), corporate financial performance (CFP), global financial crisis (GFC), Johannesburg stock exchange (JSE), share performance, shareholder wealth creation.