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):