The relevance of corporate entrepreneurship in share price performance : a mining industry study

Abstract

The South African mining industry, along with international trends, has showed an alarming decline with negative consequences on economic growth, as well as negative socio-economic impacts. However, the reliance on mining in South Africa is still significant, and ways are being investigated to prolong the industry’s life and maximise the benefits which it still holds. As production levels reduce, more dependence is placed on the underlying commodity prices to facilitate share price growth, and to provide investors with an acceptable return. With this in mind, corporate entrepreneurship (CE) becomes imperative as a third driver to unlock value for investors and to ensure the sustainability of the industry. This study explores the relationship between CE activities and its impact on the share prices of listed South African mining companies. The research used an event study methodology and included an efficient market hypotheses theoretical framework. The findings showed a significant relationship was established, between CE activities focusing on structural related actions and share prices. In addition, the study also contributed knowledge to the advantages of CE activities and its relationship with existing theories on share price influences.