Understanding drivers when investing for impact: an experimental study

Luisa De Amicis,Yamir Moreno,Carlos Gracia-Lázaro,Silvia Binenti,Ángel Sánchez,Felipe Maciel Cardoso

doi:10.1057/s41599-020-0447-y

Abstract

In the last decade, a global interest in impact investing—whose goal is to generate social and environmental benefits alongside economic returns—has rapidly grown. In this context, this paper explores the socio-demographic characteristics of investors who choose impact investment options over traditional investments, and on the drivers promoting such choices. More specifically, the study consists of an experiment-based research in which 602 participants (non-experts and experts in the financial sector) took part in a multiple-choice game involving different investment scenarios and incentive conditions. The findings show that both expert investors and female participants are more likely to choose impact investment options and that the tendency to invest in social funds increases with age. Neither external and centrally planned incentives, such as fiscal incentives, nor the educational level of participants show a significant influence on investment choices. By contrast, information about the actual social impact achieved by funds plays a role in promoting socially oriented decisions. In this regard, visual aids appear to be an effective means of promoting impact investment. These findings may be of interest to policymakers, social campaigners and investment practitioners themselves when designing strategies for raising interest in impact investing or norms to strengthen a conducive and enabling environment for social entrepreneurship more broadly.

Highlights

In the last decade, a global interest in impact investing—whose goal is to generate social and environmental benefits alongside economic returns—has rapidly grown
Impact investing is marking a new trend among traditional practitioners, institutions and policymakers worldwide, and the range of impact investment options and opportunities at global level has naturally grown in parallel to the expanding interest in social investment
To analyse the impact of each control factor on Investing Funds (IIF) investments, we performed a series of regressions (Tables 5–7)

Summary

Introduction

A global interest in impact investing—whose goal is to generate social and environmental benefits alongside economic returns—has rapidly grown. Despite the centrality of expectations and intentionality, current research has mainly focused on impact assessment and measurement frameworks aimed at capturing the environmental and social returns generated by investments (Esteves et al, 2012; Epstein and Yuthas, 2017; Findler, 2019; Hervieux and Voltan, 2019; Jackson, 2013; Karytsas et al, 2020; OConnor and Labowitz, 2017; Portales, 2019; Serafeim et al, 2020; Tsotsotso, 2020). While such a focus is critically important to matters of effectiveness, accountability and transparency, it represents a debated and contested field that dominates and largely monopolise research on impact investments. Compared to other instances of socially responsible business practices that have been widely investigated through the lens of reputation/

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