Impact investing

About: Impact investing is a research topic. Over the lifetime, 1150 publications have been published within this topic receiving 19125 citations. The topic is also known as: social impact investing.

How Does Financing Impact Investment? The Role of Debt Covenants

Abstract: We identify a specific channel (debt covenants) and the corresponding mechanism (transfer of control rights) through which financing frictions impact corporate investment. Using a regression discontinuity design, we show that capital investment declines sharply following a financial covenant violation, when creditors use the threat of accelerating the loan to intervene in management. Further, the reduction in investment is concentrated in situations where agency and information problems are relatively more severe, highlighting how the state contingent allocation of control rights can help mitigate investment distortions arising from financing frictions.

How Does Financing Impact Investment? The Role of Debt Covenants

Abstract: We identify a specific channel (debt covenants) and the corresponding mechanism (transfer of control rights) through which financing frictions impact corporate investment. Using a regression discontinuity design, we show that capital investment declines sharply following a financial covenant violation, when creditors use the threat of accelerating the loan to intervene in management. Further, the reduction in investment is concentrated in situations in which agency and information problems are relatively more severe, highlighting how the state-contingent allocation of control rights can help mitigate investment distortions arising from financing frictions.

Socially Responsible Investing in the United States

Abstract: Socially responsible investing (SRI) has emerged in recent years as a dynamic and quickly growing segment of the U.S. financial services industry involving over $2 trillion in professionally managed assets. Its conceptual origins can be found in the early history of civilization, with it's modern roots in the 1960s. This paper provides an overview of the breadth and depth of the concept and practice of socially and environmentally responsible investing, describes the investment strategies that together define SRI as currently practiced in the U.S., offers several observations about some of the factors fueling its dramatic growth, and presents data showing that investors who choose to invest in a socially and environmentally responsible manner can do so without giving up investment returns. SRI has matured to a point where virtually any investment need can be met through portfolio design that integrates an investor's personal values, institutional mission, and/or social priorities. The socially responsible investment industry in the UnitedStates is a young phenomenon. Even referring to it as an "industry" ten years ago may have been a bit of a stretch. While it has grown dramatically in recent years, it is an area of work, of study and of practical application that continues to evolve in many significant ways. One intriguing example of the ongoing development of the field can be found in the analysis of the language used to describe it. The terms social investing, socially responsible investing, ethical investing, socially aware investing, socially conscious investing, green investing, values-based investing, and mission-based or mission-related investing all refer to the same general process and are often used interchangeably.

Managing investment in information technology; mini case examples and implications

Abstract: While businesses are investing enormous resources in information technology (IT), there little evidence linking IT investment to organizational performance. The purpose of this article, therefore, is to increase understanding of the basis for IT investment in firms. Six mini case studies of companies in five different industries address questions of how they define IT for the purpose of determining the level of investment, how they track IT investments, and what other factors influence IT investment decisions. Each organization uses a different definition of IT, but there appears to be an overall trend to broaden the definition. Although companies track IT investment with varying degrees of rigor, they appear to be generally moving toward centralized tracking of all IT investment. Political considerations are important and significantly impact investment decisions. In all cases, the effectiveness with which IT investment is converted to useful output is acknowledged to be affected by the implementation process, the culture of the organization, and the skill of management. Three ma/or implications for practi~bners responsible for IT investment are: the need to adopt a broad definition of IT and track it over time against a convenient base; the need to separate different types of investment and match them to appropriate organizational performance measures; and the need to take into account factors such as management commitment and previous experience with IT. The latter impacts the effectiveness with which the firm converts it investment into. useful outputs.