Black economic empowerment (BEE) and its influence on listed firms’ liquidity: an SA REIT’s perspective

Nosipho Moloi, Omokolade Akinsomi and Woei Chyuan Wong

Journal of Property Investment & Finance, 2025, vol. 43, issue 5, 543-569

Abstract: PurposeThis paper examines the liquidity of SA REITs and their relationship to the Black Economic Empowerment (BEE) score. Firm liquidity has long been an area of research interest. In South Africa, all REITs are required to share a substantial percentage of their revenue towards BEE; thus, this directly affects their liquidity. The paper adopts the BEE score for all SA REITs to measure their compliance levels and the link to a REIT liquidity.Design/methodology/approachThirty-three REITs from 2013 until 2024 are adopted. To capture the different dimensions of a securitised REIT, more than one liquidity measure is used. We use four proxies to calculate REIT liquidity we then use ordinary least squares models and fixed effects for analysis.FindingsThe study finds that the BEE has a positive association with an SA REIT liquidity, implying that REITs that comply with BEE policy are likely to have improved liquidity.Practical implicationsComplying with government policy has been linked with firms’ good financial standing. Highly compliant REITs wanting to maintain their liquidity levels should consider the influence of the macro-economic factors, particularly the adverse relationships that negatively affect REIT liquidity, such as employment levels.Originality/valueThis is the first study to probe the BEE and REIT liquidity in the South African context.

Keywords: REITs; Liquidity; BEE; BEE score; Performance; Market capitalisation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/jpif/article/43/5/543/1270 ... EE-and-its-influence (text/html)
https://www.emerald.com/jpif/article-pdf/43/5/543/ ... f-10-2024-0130en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jpifpp:jpif-10-2024-0130

DOI: 10.1108/JPIF-10-2024-0130

Access Statistics for this article

Journal of Property Investment & Finance is currently edited by Nick French

More articles in Journal of Property Investment & Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().