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How to attract professional investors in developing countries? An evidence-based structure for development impact bonds

Author

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  • Gallucci, Carmen
  • Giudice, Alfonso Del
  • Santulli, Rosalia

Abstract

This paper deals with the rationale issue of financing developing countries by deepening the characteristics of Development Impact Bonds (DIBs). The World Economic Forum, in 2018, introduced them as “pioneering and promising financial instruments”. However, to date, their spread is modest because of their structural, contractual and financial features, which make them unattractive to professional investors. Therefore, the paper proposes a new DIB structure, which is more appealing and easy-to-understand for practitioners and is able to mitigate potential agency problems.

Suggested Citation

  • Gallucci, Carmen & Giudice, Alfonso Del & Santulli, Rosalia, 2022. "How to attract professional investors in developing countries? An evidence-based structure for development impact bonds," Finance Research Letters, Elsevier, vol. 46(PA).
    • Handle: RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612322001209
    DOI: 10.1016/j.frl.2022.102816
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    References listed on IDEAS

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    1. Mario La Torre & Annarita Trotta & Helen Chiappini & Alessandro Rizzello, 2019. "Business Models for Sustainable Finance: The Case Study of Social Impact Bonds," Sustainability, MDPI, vol. 11(7), pages 1-23, March.
    2. Susan Christina Welburn & Kevin Louis Bardosh & Paul Gerard Coleman, 2016. "Novel Financing Model for Neglected Tropical Diseases: Development Impact Bonds Applied to Sleeping Sickness and Rabies Control," PLOS Neglected Tropical Diseases, Public Library of Science, vol. 10(11), pages 1-5, November.
    3. Knack, Stephen & Rogers, F. Halsey & Eubank, Nicholas, 2011. "Aid Quality and Donor Rankings," World Development, Elsevier, vol. 39(11), pages 1907-1917.
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    Cited by:

    1. Eduardo da Silva Fernandes & Inês Hexsel Grochau & Carla Schwengber Ten Caten, 2023. "Impact Investing: Determinants of External Financing of Social Enterprises in Brazil," Sustainability, MDPI, vol. 15(15), pages 1-21, August.
    2. Walker, Thomas & Goubran, Sherif & Karami, Moein & Dumont-Bergeron, Adele & Schwartz, Tyler & Vico, Kalima, 2023. "Mainstreaming social impact bonds: A critical analysis," Finance Research Letters, Elsevier, vol. 53(C).
    3. Paweł Mikołajczak, 2023. "Comparative study of social impact bonds – capital per beneficiary and scheme duration," Bank i Kredyt, Narodowy Bank Polski, vol. 54(2), pages 191-220.

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