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Corporate Social Responsibility and Instrumental Stakeholder Theory: Contextualizing B-BBEE and Firm Performance

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This paper focuses on the corporate social responsibilities (CSR) implications of a change in the definition of “black” in broad-based black economic empowerment (B-BBEE) in South Africa. By merging the traditional shareholder and stakeholder perspectives, we develop a more targeted version of the enlightened stakeholder theory which identifies shareholders as the most instrumental stakeholders. We hypothesize that the expansion of the B-BBEE policy definition will result in positive abnormal returns in socially responsible firms. The results showed support for the assertion that firm performance (returns) is influenced by BEE scores and the firm’s industry, but none for any abnormal returns.

Author(s):

Leah Ndanga    
University of Massachusetts Amherst
United States

Mzamo Mangaliso    
University of Massachusetts Amherst
United States