SMEs and Black Economic Empowerment in South Africa

Black Economic Empowerment (BEE) is a South African policy that aims to decrease racial inequality and incentivises firms to train, hire, promote and transfer ownership to black people. However, the policy struggles to reach its goals. This article investigates the determinants of BEE compliance of small and medium-sized enterprises (SMEs) to understand the challenges towards BEE adoption for SMEs. Considering the BEE certification decision and the BEE compliance level, the results show that, e.g., firm location, age, industry, owner and manager characteristics, and firm size are significantly associated with BEE compliance