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Investing in a Social Venture to Generate Social Impact or Financial Return

Author

Listed:
  • Boris Urban
  • Odifentse Mapula-e Lehasa
Abstract
Recognizing that the current literature provides a fragmented depiction of impact investor decisions, this article empirically examines if impact investors are focused on financial returns or instead on the social impact generated by social enterprises. To address this research objective a sample of impact investors are surveyed in South Africa, where there is an increasing demand for impact investors to fund initiatives that address the country’s many underlying structural deficits and wicked problems. Findings, based on correlational and regression analyses, indicate that variation in the impact investment decision is explained by the financial return motive. This finding resonates with the argument that investors are primarily focused on financial competitiveness and return on their investment. Developing a strong body of evidence that validates the effectiveness of policy in supporting impact investing is pivotal, particularly when given the lack of sustainability of many social enterprises in African and emerging economies.

Suggested Citation

  • Boris Urban & Odifentse Mapula-e Lehasa, 2024. "Investing in a Social Venture to Generate Social Impact or Financial Return," Business Perspectives and Research, , vol. 12(4), pages 633-646, October.
    • Handle: RePEc:sae:busper:v:12:y:2024:i:4:p:633-646
    DOI: 10.1177/22785337221132614
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    References listed on IDEAS

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