The influence of selected non-financial and macroeconomic determinants on delistings in South Africa

Abstract

This study explores the factors possibly driving delisting from the Johannesburg Stock Exchange (JSE) in South Africa, focusing on selected non-financial and macroeconomic determinants. Using data from 2010 to 2023, the analysis covers 302 delisted companies and a matched control group of 302 still-listed companies. The control group was matched based on sector classification and asset size to ensure comparability. The analysis identifies key non-financial factors such as governance transparency and independence, chairperson qualifications, ownership structure, institutional influence, company longevity and listing duration, and analyst recommendations. Strong governance and diverse ownership structures are associated with reduced delisting risk, while positive analyst coverage and extended market presence enhance corporate stability. Macroeconomic variables – including inflation, interest rates, credit extension, unemployment, and economic activity – also play significant roles in shaping delisting outcomes. The findings are situated within the South African context, a developing economy, and highlight the importance of robust governance, inclusive ownership, and strong institutional relationships. The study offers policy-relevant insights, advising regulators to manage inflation, interest rates, and credit availability, while addressing unemployment and stimulating economic activity to support corporate sustainability and investor confidence.