Black economic empowerment,legitimacy and the value added statement: evidence from post‐apartheid South Africa |
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Authors: | Steven F Cahan Chris J Van Staden |
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Institution: | 1. Department of Accounting and Finance, University of Auckland Business School, Auckland, 1010, New 2. Zealand |
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Abstract: | We examine why companies in South Africa voluntarily provide a value added statement (VAS). The VAS can be used by management to communicate with employees and thereby establish a record of legitimacy. Since we want to establish if the VAS is used to establish symbolic or substantive legitimacy, we examine whether production of a VAS is associated with actual performance in labour‐related areas. To measure labour‐related performance, we use an independent Black Economic Empowerment (BEE) rating. We find that BEE performance is significantly and positively related to the voluntary publication of a VAS. Our results suggest that BEE performance and disclosure of a VAS are two elements of a strategy used by South African companies to establish their substantive legitimacy with labour. |
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Keywords: | Labour relations Accounting disclosures Substantive legitimacy Black economic empowerment South  Africa M41 |
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