Long-run Returns to Impact Investing in Emerging Market and Developing Economies
There is interest in impact investing, the idea of deploying capital to obtain both financial and social returns. But private financial returns are only possible if capital markets are not perfectly integrated, so profit opportunities still exist in certain markets. This proposition is put to th...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/171981598466193496/Long-run-Returns-to-Impact-Investing-in-Emerging-Market-and-Developing-Economies http://hdl.handle.net/10986/34383 |
| Summary: | There is interest in impact investing, the idea of deploying
capital to obtain both financial and social returns. But private
financial returns are only possible if capital markets are
not perfectly integrated, so profit opportunities still exist in
certain markets. This proposition is put to the test by examining
every equity investment made by one of the largest
and longest-operating impact investors across 130 emerging
market and developing economies. Since 1961 this
portfolio has performed comparably to public and private
equity in the United States, though it has under-performed
since 2010. Investments in larger economies have higher
returns, and returns decline as banking systems deepen and
countries relax capital controls. These results are consistent
with a core thesis of impact investing that some eligible
markets do not receive sufficient investment capital. |
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