Publication Type

Journal Article

Version

acceptedVersion

Publication Date

1-2022

Abstract

While ESG investing has become mainstream, impact investment has yet to be institutionalised and legitimized. We investigate how impact investment firms claim legitimacy compared to their ESG peers. Impact investment is still a nascent field and suffers from a heavier burden of proof. Legitimacy has been recognised as a strategy to overcome the liability of newness. Combining private market data with statements made by investment firms on their websites we investigate how they claim legitimacy. We find that impact investment firms are more likely to claim to be involved in partnerships, specifically with academia and corporations than their ESG peers. These serve as complimentary sources of legitimacy for the dual goal of impact investors: Corporations give legitimacy to the commercial angle while academia supports legitimizing measurement of positive impact. Results for NGOs and governments as partners are insignificant. This first comparative quantitative study investigates the distinct differentiations impact investment firms employ to claim legitimacy compared to ESG investment firms and how legitimacy is claimed using associations. Most existing literature focuses on the investment perspective while this research takes an organisational lens.

Discipline

Finance and Financial Management

Research Areas

Integrative Research Areas

Publication

Investment Style

First Page

1

Last Page

37

Identifier

10.2139/ssrn.4106603

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