Long-run Returns to Impact Investing in Emerging Markets and Developing Economies

Long-run Returns to Impact Investing in Emerging Markets and Developing Economies

Organized by the Private Sector Development Research Network

Hosted by IDB Invest
Moderated by Alessandro Maffioli, Managing Director of Development Effectiveness, IDB Invest 

Friday, 17 November 2023, from 9-10am EST [RECORDING AVAILABLE UPON REQUEST]


There is interest in impact investing, the idea of deploying capital to obtain both financial and social returns. But private financial returns are only possible if capital markets are not perfectly integrated, so profit opportunities still exist in certain markets. During this seminar, a paper putting this proposition to the test will be presented and discussed. This study examines every equity investment made by one of the largest and longest-operating impact investors across 130 emerging market and developing economies. Since 1961 this portfolio has performed comparably to public and private equity in the United States, though it has underperformed since 2010. Investments in larger economies have higher returns, and returns decline as banking systems deepen and countries relax capital controls. The study’s results are consistent with a core thesis of impact investing that some eligible markets do not receive sufficient investment capital.


Shawn Cole 

John G. McLean Professor of Business Administration, Harvard Business School 

Dr. Cole is a professor in the Finance Unit at Harvard Business School, where he teaches and conducts research on financial services, social enterprise, and impact investing. Much of his research examines corporate and household finance in emerging markets, with a focus on insurance, credit, and savings. He has also done extensive work on financial education in the US and emerging markets. His recent research focuses on designing and delivering advice and education over mobile phones, with an emphasis on agricultural and financial management.

Dr. Cole has worked in China, India, Indonesia, South Africa, and Vietnam. He is an affiliate of the National Bureau of Economic Research, and the Bureau for Research and Economic Analysis of Development. He is on the board of the Jameel Poverty Action Lab, as the co-chair for research.

Before joining the Harvard Business School, Dr. Cole worked at the Federal Reserve Bank of New York in the economic research department. He has served on the Boston Federal Reserve’s Community Development Research Advisory Council, served as an external advisor to the Gates Foundation, and was the chair of the endowment management committee of the Telluride Association, a non-profit educational organization. He is a cofounder and board chair of a non-profit, Precision Agriculture for Development.

He received a Ph.D. in economics from the Massachusetts Institute of Technology in 2005, where he was an NSF and Javits Fellow, and an A.B. in Economics and German Literature from Cornell University. His work on insurance earned the 2015 “Shin Research Excellence Award;” in 2015 he was also named given a “Faculty Pioneer Award” from the Aspen Institute.


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