B-BBEE laws and mutual funds’ performance: what do we know?

Nixon S. Chekenya

Studies in Economics and Econometrics, 2025, vol. 49, issue 1, 53-75

Abstract: The paper builds on an analysis by Chekenya and Klingelhöfer to examine the possible existence of systematic performance differences between B-BBEE affiliated and non-B-BBEE affiliated mutual fund firms in South Africa and see whether the indigenisation laws affect firm performance directly through their effects on firm behaviour. Our key conjecture is that by distinguishing between different mechanisms by which B-BBEE laws can affect mutual fund performance, there are observed significant positive effects at the level of firm behaviour. To the extent that the concept of B-BBEE in South Africa fosters economic progress, the results of this study suggest that investors not necessarily view such a policy negatively. The paper’s results also cannot confirm with statistical significance the expectation motivated by theory that B-BBEE laws influence firm performance negatively, thus, predicting a block for foreign investment. Our much longer sample period (from 2004 to 2016) does not lead to significant other results than a prior study published only shortly after the B-BBEE laws coming into force. However, our results could not confirm that these laws have effects on firm performance.

Date: 2025
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DOI: 10.1080/03796205.2024.2441821

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