Browsing by Subject "Profitability"

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    Deconstructing profitability under apartheid: 1960-1989
    (Taylor & Francis, 2014) Nattrass, Nicoli
    This paper discusses trends in South African profitability between 1960 and 1989 (the last peak year before the release of Nelson Mandela in 1990). It is argued that where distributional conflict is a persistent feature of the economic historical landscape, or is claimed to be of central importance (as is the case with regard to the radical ‘cheap labour’ theory of capital accumulation and growth under apartheid), examining trends in profitability and the underlying forces behind it may be of some assistance to economic historians. Trends in the profit rate can be linked to institutional transformation, and deconstructing the profit rate can help isolate the relative importance of the profit share and productivity in shaping the rate of return for capitalists. The empirical analysis finds that there were different economic factors at work behind trends in profitability between 1960 and 1989, and that Marxist claims about cheap labour being the basis for supposedly rising profitability and growth under apartheid are not supported by the data. Rather, the paper highlights the role of falling capital productivity as the key determinant of falling profitability – developments which suggests that investment in the late apartheid period was misdirected in significant ways.
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    Green gains: a case for South African-listed firms
    (2025) Gichanga, John Mwati; Karimu, Amin
    This study investigates the impact of Environmental, Social, and Governance (ESG) performance on firm value and profitability for firms listed on the South Africa Stock Exchange from 2013 to 2021, using data from Bloomberg. To mitigate possible endogeneity, we utilized the two-stage least squares (2SLS) regression model, using lagged ESG scores (L2), ESG- related bonuses, and executive compensation as instruments. Our findings reveal that strong ESG performance positively influences firm profitability, but negatively impacts firm value as measured by Tobin's Q. The study suggests that ESG can enhance a firm's efficiency in its current operations, but it does not significantly contribute to its value creation. Furthermore, the Governance dimension of ESG is not statistically significant in both Tobin's Q and ROA models. Fixed Effects Model (FEM) analysis yielded insignificant results, highlighting the potential effects of endogeneity and its consequences if not addressed. This research contributes to the literature on ESG and financial performance by demonstrating the effectiveness of using robust instrumental variables and controlling for unobserved time- varying factors to derive unbiased estimates. The insights gained from this study can inform policymakers, industry leaders, and academics about the strategic integration of ESG considerations into corporate and investment practices, ultimately fostering sustainable development and enhancing financial performance.