SOUTH AFRICAN DISINVESTMENT: CAUSES AND EFFECTS

In: Contemporary economic policy: a journal of Western Economic Association International, Band 6, Heft 4, S. 105-117

Abstract

Divestment pressure is one channel through which those interest groups opposing apartheid have attempted to induce U.S. firms to withdraw from South Africa. This paper investigates empirically the relationship between stockholder influence, disinvestment, and the behavior of South Africa‐active firms. The paper finds that if institutional investors hold a large proportion of a firm's shares, then that firm will be induced to participate in fair employment and social programs to benefit its black labor force. However, the same "socially responsible" firm is also more likely to disinvest—leaving a less progressive employer in its place.