IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v86y2023icp349-363.html
   My bibliography  Save this article

The investor's participation in social impact bonds

Author

Listed:
  • Mazzuca, Maria
  • Panzera, Elena
  • Ruberto, Sabrina

Abstract

Considering 181 Social Impact Bonds (SIBs) until 2020, we study the factors impacting on the number of investors, those influencing the institutional investor's participation, and the determinants of the philanthropic investor's commitment. We find that the risks of the projects are shared by several investors, the institutional investors are more attracted by less risky SIBs, the commitment of philanthropic investor translates into a greater investment. SIBs prove more attractive to non-mainstream investors. Results permit the exclusion of a social washing phenomenon in the SIBs' world and could be a starting point for harmonizing the controversial positions of academics on SIBs.

Suggested Citation

  • Mazzuca, Maria & Panzera, Elena & Ruberto, Sabrina, 2023. "The investor's participation in social impact bonds," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 349-363.
    • Handle: RePEc:eee:reveco:v:86:y:2023:i:c:p:349-363
    DOI: 10.1016/j.iref.2023.03.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056023000886
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2023.03.017?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cooper, Christine & Graham, Cameron & Himick, Darlene, 2016. "Social impact bonds: The securitization of the homeless," Accounting, Organizations and Society, Elsevier, vol. 55(C), pages 63-82.
    2. Cory Searcy, 2012. "Corporate Sustainability Performance Measurement Systems: A Review and Research Agenda," Journal of Business Ethics, Springer, vol. 107(3), pages 239-253, May.
    3. Michael Schröder, 2007. "Is there a Difference? The Performance Characteristics of SRI Equity Indices," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(1‐2), pages 331-348, January.
    4. Mariarosaria Agostino & Annamaria Nifo & Francesco Trivieri & Gaetano Vecchione, 2020. "Rule of law and regulatory quality as drivers of entrepreneurship," Regional Studies, Taylor & Francis Journals, vol. 54(6), pages 814-826, June.
    5. Elaine de Gruyter & Dennis Petrie & Nicole Black & Philip Gharghori, 2020. "Attracting investors for public health programmes with Social Impact Bonds," Public Money & Management, Taylor & Francis Journals, vol. 40(3), pages 225-236, April.
    6. Alan Gregory & John Matatko & Robert Luther, 1997. "Ethical Unit Trust Financial Performance: Small Company Effects and Fund Size Effects," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 24(5), pages 705-725, June.
    7. Eleonora Broccardo & Maria Mazzuca, 2021. "Social impact bonds: challenges and success," Chapters, in: Othmar M. Lehner (ed.), A Research Agenda for Social Finance, chapter 10, pages 223-240, Edward Elgar Publishing.
    8. Antony Bugg-Levine & Jed Emerson, 2011. "Impact Investing: Transforming How We Make Money while Making a Difference," Innovations: Technology, Governance, Globalization, MIT Press, vol. 6(3), pages 9-18, July.
    9. Anand, Paul & Cowton, Christopher J., 1993. "The ethical investor: Exploring dimensions of investment behaviour," Journal of Economic Psychology, Elsevier, vol. 14(2), pages 377-385, June.
    10. Mildred E. Warner, 2013. "Private finance for public goods: social impact bonds," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 16(4), pages 303-319, December.
    11. Mackenzie, Craig & Lewis, Alan, 1999. "Morals and Markets: The Case of Ethical Investing," Business Ethics Quarterly, Cambridge University Press, vol. 9(3), pages 439-452, July.
    12. Derwall, Jeroen & Koedijk, Kees & Ter Horst, Jenke, 2011. "A tale of values-driven and profit-seeking social investors," Journal of Banking & Finance, Elsevier, vol. 35(8), pages 2137-2147, August.
    13. Webley, Paul & Lewis, Alan & Mackenzie, Craig, 2001. "Commitment among ethical investors: An experimental approach," Journal of Economic Psychology, Elsevier, vol. 22(1), pages 27-42, February.
    14. Eleonora Broccardo & Maria Mazzuca & Maria Laura Frigotto, 2020. "Social impact bonds: The evolution of research and a review of the academic literature," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1316-1332, May.
    15. Luluk Widyawati, 2020. "A systematic literature review of socially responsible investment and environmental social governance metrics," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 619-637, February.
    16. Galema, Rients & Plantinga, Auke & Scholtens, Bert, 2008. "The stocks at stake: Return and risk in socially responsible investment," Journal of Banking & Finance, Elsevier, vol. 32(12), pages 2646-2654, December.
    17. Edmans, Alex, 2011. "Does the stock market fully value intangibles? Employee satisfaction and equity prices," Journal of Financial Economics, Elsevier, vol. 101(3), pages 621-640, September.
    18. Alan Gregory & John Matatko & Robert Luther, 1997. "Ethical Unit Trust Financial Performance: Small Company Effects and Fund Size Effects," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 24(5), pages 705-725.
    19. Eleonora Broccardo & Maria Mazzuca, 2019. "The missing link? Finance, public services, and co-production: The case of social impact bonds (SIBs)," Public Money & Management, Taylor & Francis Journals, vol. 39(4), pages 262-270, May.
    20. Marika Arena & Irene Bengo & Mario Calderini & Veronica Chiodo, 2016. "Social Impact Bonds: Blockbuster or Flash in a Pan?," International Journal of Public Administration, Taylor & Francis Journals, vol. 39(12), pages 927-939, October.
    21. Schinckus, Christophe, 2017. "Financial innovation as a potential force for a positive social change: The challenging future of social impact bonds," Research in International Business and Finance, Elsevier, vol. 39(PB), pages 727-736.
    22. Mildred E. Warner, 2013. "Private finance for public goods: social impact bonds," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 16(4), pages 303-319, December.
    23. Bert Scholtens, 2006. "Finance as a Driver of Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 68(1), pages 19-33, September.
    24. Mark V. Pauly, 2017. "Social Impact Bonds: New Product or New Package?," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 33(4), pages 718-760.
    25. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
    26. Eleonora Broccardo & Maria Mazzuca, 2018. "An alternative way to think of finance: the case of innovative, sustainable financial instruments," Chapters, in: Sabri Boubaker & Douglas Cumming & Duc K. Nguyen (ed.), Research Handbook of Investing in the Triple Bottom Line, chapter 9, pages 185-211, Edward Elgar Publishing.
    27. David A. Sauer, 1997. "The impact of social‐responsibility screens on investment performance: Evidence from the Domini 400 social index and Domini Equity Mutual Fund," Review of Financial Economics, John Wiley & Sons, vol. 6(2), pages 137-149.
    28. Chris Giacomantonio, 2017. "Grant-Maximizing but not Money-Making: A Simple Decision-Tree Analysis for Social Impact Bonds," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 8(1), pages 47-66, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luluk Widyawati, 2020. "A systematic literature review of socially responsible investment and environmental social governance metrics," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 619-637, February.
    2. Eleonora Broccardo & Maria Mazzuca & Maria Laura Frigotto, 2020. "Social impact bonds: The evolution of research and a review of the academic literature," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1316-1332, May.
    3. Rosella Carè & Stella Carè & Nathalie Lévy & Rabia Fatima, 2023. "Missing finance in social impact bond research? A bibliometric overview between past and future research," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2101-2120, September.
    4. Walker, Thomas & Goubran, Sherif & Karami, Moein & Dumont-Bergeron, Adele & Schwartz, Tyler & Vico, Kalima, 2023. "Mainstreaming social impact bonds: A critical analysis," Finance Research Letters, Elsevier, vol. 53(C).
    5. Felipe Arias Fogliano de Souza Cunha & Erick Meira & Renato J. Orsato, 2021. "Sustainable finance and investment: Review and research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3821-3838, December.
    6. Sebastian Lobe & Christian Walkshäusl, 2016. "Vice versus virtue investing around the world," Review of Managerial Science, Springer, vol. 10(2), pages 303-344, March.
    7. Nicholas Apergis & Vassilios Babalos & Christina Christou & Rangan Gupta, 2019. "Are there Really Long-Run Diversification Benefits from Sustainable Investments?," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 18(2), pages 141-163, September.
    8. Mehmet Balcilar & Riza Demirer & Rangan Gupta, 2017. "Do Sustainable Stocks Offer Diversification Benefits for Conventional Portfolios? An Empirical Analysis of Risk Spillovers and Dynamic Correlations," Sustainability, MDPI, vol. 9(10), pages 1-18, October.
    9. Julian Amon & Margarethe Rammerstorfer & Karl Weinmayer, 2021. "Passive ESG Portfolio Management—The Benchmark Strategy for Socially Responsible Investors," Sustainability, MDPI, vol. 13(16), pages 1-21, August.
    10. Paweł Mikołajczak, 2023. "Comparative study of social impact bonds – capital per beneficiary and scheme duration," Bank i Kredyt, Narodowy Bank Polski, vol. 54(2), pages 191-220.
    11. Mario La Torre & Helen Chiappini (ed.), 2020. "Contemporary Issues in Sustainable Finance," Palgrave Studies in Impact Finance, Palgrave Macmillan, number 978-3-030-40248-8, December.
    12. Guillermo Badía & Luis Ferruz & Maria Céu Cortez, 2021. "The performance of social responsible investing from retail investors' perspective: international evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6074-6088, October.
    13. Lars Hornuf & Gül Yüksel, 2022. "The Performance of Socially Responsible Investments: A Meta-Analysis," CESifo Working Paper Series 9724, CESifo.
    14. Harvie, David & Lightfoot, Geoff & Lilley, Simon & Weir, Kenneth, 2021. "Social investment innovation and the ‘social turn’ of neoliberal finance," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 79(C).
    15. Mario La Torre & Annarita Trotta & Helen Chiappini & Alessandro Rizzello, 2019. "Business Models for Sustainable Finance: The Case Study of Social Impact Bonds," Sustainability, MDPI, vol. 11(7), pages 1-23, March.
    16. Iván Barreda-Tarrazona & Juan Matallín-Sáez & Mª Balaguer-Franch, 2011. "Measuring Investors’ Socially Responsible Preferences in Mutual Funds," Journal of Business Ethics, Springer, vol. 103(2), pages 305-330, October.
    17. Leonardo Becchetti & Fabio Pisani & Francesco Salustri & Lorenzo Semplici, 2022. "The frontier of social impact finance in the public sector: Theory and two case studies," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(4), pages 887-912, December.
    18. Leite, Paulo & Cortez, Maria Céu, 2014. "Style and performance of international socially responsible funds in Europe," Research in International Business and Finance, Elsevier, vol. 30(C), pages 248-267.
    19. Mariano Méndez-Suárez & Abel Monfort & Fernando Gallardo, 2020. "Sustainable Banking: New Forms of Investing under the Umbrella of the 2030 Agenda," Sustainability, MDPI, vol. 12(5), pages 1-13, March.
    20. Koenigsmarck, Markus & Geissdoerfer, Martin, 2023. "Shifting the Focus to Measurement: A Review of Socially Responsible Investing and Sustainability Indicators," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 136617, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).

    More about this item

    Keywords

    Social impact bond; Investor; Sustainable investor; Sustainable finance;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:86:y:2023:i:c:p:349-363. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.