Drivers of Investor Motivations for Impact Investments: The Case of Microfinance

Abstract

Recent empirical research shows that both financial and value-related considerations prevail for an individual's decision to invest in companies or products deemed sustainable or socially responsible. This paper investigates how different investor motivations vary across forms of sustainable investment strategies, in particular between broad sustainable investments and targeted impact investments. We use a unique dataset of retail investors engaged in a development oriented microfinance investment vehicle to analyze how different motives affect the demand for distinct sustainable investments. Our results show that different motives trigger different types of sustainable investments. While decisions to engage in general sustainable investments are mainly linked to return and risk expectations, the investment decision for the impact investment vehicle is connected more strongly to value attributes. In line with previous findings on general sustainable investments, we find that the decision to invest is driven more by value-related criteria while the amount invested is driven by financial motivations. Our analysis furthermore shows that distrust in the financial markets is a major driver for the share invested in general sustainable investments, but not in impact investments.

Determinantes do investimento em impacto socioambiental por famílias empresárias: um estudo quantitativo com famílias brasileiras

“…forma a lidar com a tensão entre duas expectativas aparentemente opostas. Porém, a literatura registra que retornos de mercado, ou até mesmo superiores, são possíveis para os investimentos de impacto, justamente pela presença de um outro tradeoff, entre expectativas de curto e longo prazos, atenuando ou até eliminando a aparente contradição entre lucro e impacto (MOGAPI; SUTHERLAND; WILSON-PRANGLEY, 2018; MEYER; KRAUSS;BACHMANN, 2019).A literatura acadêmica reconhece que os termos "investimentos de impacto" e "finanças sociais" podem ser usados de forma intercambiável, sem haver nisso qualquer problema conceitual (HÖCHSTÄDTER; SCHECK, 2015; AGRAWAL; HOCKERTS, 2019a). Entretanto, é importante diferenciar adequadamente os investimentos socialmente responsáveis (do inglês, Socially Responsible Investments ou SRI) dos investimentos de impacto.…”