Barber, Morse, and Yasuda (2016)
Barber, Brad, Adair Morse, and Ayako Yasuda. “Impact Investing.” Working paper (University of California, Davis), January 2016.
From the authors' abstract: "We study investments in impact funds, defined as venture capital or growth equity funds with dual objectives of generating financial returns and positive externalities. Being an impact fund elevates a fund’s marginal investment rate by 14.1% relative to a traditional VC fund, even more for funds focused on environmental, poverty, and minority/women issues. Europeans and UNPRI signatories have sharply higher demand for impact. Three investor attributes – household-backed capital, mission-oriented investors, and investors facing political/regulatory pressure to invest in impact – account for the higher impact demand. In contrast, legal restrictions against impact (e.g., ERISA) hinder 25% of total demand."
LK comment: Strong paper, but noted ‘very preliminary’. This paper won the 2016 Moskowitz Prize.
Link (2018 revised version): https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2705556