Long-run Returns to Impact Investing in Emerging Market and Developing Economies

Shawn Allen Cole, Martin Melecký, Florian Molders and Tristan Reed

No 9366, Policy Research Working Paper Series from The World Bank

Abstract: There is growing interest in impact investing, the idea of deploying capital to obtain both financial and social or environmental returns. Examination of every equity investment made by the International Finance Corporation, one of the largest and longest-operating impact investors, across 130 emerging market and developing economies shows that this portfolio has outperformed the S&P 500 by 15 percent. Investments in larger economies have higher returns, and returns decline as banking systems deepen and countries relax capital controls. These results are consistent with imperfect integration of international capital markets, and a core thesis of impact investing that some eligible markets do not receive sufficient investment capital.

Keywords: Non Bank Financial Institutions; Financial Sector Policy; Capital Markets and Capital Flows; Capital Flows (search for similar items in EconPapers)
Date: 2020-08-26
New Economics Papers: this item is included in nep-fdg
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