Gamtkitsulashvili, Tea, Plekhanov, Alexander and Stepanov, Alexander (2023) Killing two birds with one stone? Sound investment with social impact. Economics of Transition and Institutional Change. ISSN 2577-6975
Full text not available from this repository.Abstract
This paper uses a novel dataset on investments by the European Bank for Reconstruction and Development to quantify a (sizeable) trade-off between the impact and financial objectives of a large lender. The unique feature of this dataset is ex ante records of impact. These are made at the early stages of work on each transaction alongside probability-of-default scores. Impact scores are further updated at the final approval stage with around 55 percent of transaction concepts translating into signed deals. We show that this approach delivers a simultaneous selection of debt investments on the quality of credit and impact with a sizable trade-off between pursuing commercial and development objectives. For commercially riskier investments, impact characteristics have a greater bearing on the probability of an investment going ahead. We further use machine-learning analysis to show that the impact of some investments is strengthened prior to project approval.
| Item Type: | Article |
|---|---|
| Official URL: | https://onlinelibrary.wiley.com/journal/25776983 |
| Additional Information: | © 2023 European Bank for Reconstruction and Development. |
| Divisions: | Geography & Environment |
| Subjects: | H Social Sciences > HG Finance H Social Sciences > HF Commerce |
| Date Deposited: | 06 Nov 2023 15:36 |
| Last Modified: | 25 Apr 2024 17:09 |
| URI: | http://eprints.lse.ac.uk/id/eprint/120656 |
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