Understanding drivers when investing for impact: an experimental study

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.

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