Current demand and supply of impact investments across different geographic regions, sectors, and stages of business: Match or mismatch?

Abstract

We examine the match/mismatch between the demand and supply of impact investments. We show that some geographic regions display an upward match, while others exhibit a downward match. We explain how regions with well-developed (or less-developed) economies are not necessarily equal to regions with well-developed (or less-developed) impact investment markets. We also highlight the sectors exhibiting a match or mismatch between the demand and supply of investments, and explain the potential reasons. Regarding both geographic and sector concentration, the demand for investments is much more concentrated than their supply. Finally, early-stage companies suffer from an undersupply of investments, while growth-stage companies display an upward match and mature companies have an oversupply of investments. These findings have implications for impact investing theory and practice, including the attainment of Sustainable Development Goals.JEL Classification: D53; E41; E51; G15; G23