Black Economic Empowerment (BEE) and its Influence on Listed Firms’ Liquidity: SA REIT’s Perspective

Nosipho Moloi and Omokolade Akinsomi

AfRES from African Real Estate Society (AfRES)

Abstract: This paper examines the liquidity of SA REITs and their relationship to the Black Economic Empowerment (BEE) score. SA REITs are a model of REIT in the African context, and their level of good financial standing is mandatory. Firm liquidity is one of the areas of interest in research and emerging economies have policies that influence the functioning of organisations. SA is a country with such policies, and these influence the functioning of a firm. The paper adopts the BEE score for all SA REITs to measure their compliance levels and the link to a REIT liquidity. Thirty-three REITs are adopted from 2013 until 2022. More than one liquidity measure is used to capture the different dimensions of a securitised REIT. This analysis uses four proxies to calculate REIT liquidity. We use ordinary least squares models (OLS). The study finds that the BEE positively correlates with SA REIT liquidity, implying that REITs that comply with BEE policy are likely to have improved liquidity. Complying with government policy has been linked with firms' good financial standing.

Keywords: Black Economic Empowerment; Liquidity; REITs (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2024-01-01
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