Impact Investments in Emerging Markets: Do They Matter? A Study of Female Entrepreneurship in Emerging Markets

This study addresses persistent gender inequality in business ownership by exploring the role of impact investments – investment to optimize both financial and social outcomes – in fostering female entrepreneurship in emerging markets. As impact investors are increasingly driven by the dual goals of social and financial returns, the authors investigate whether and how such investments facilitate women’s participation in firm ownership. Drawing on a dataset of 81,498 impact investments across 110 developing countries between 2006 and 2023, the authors find that impact investment is positively associated with increased female ownership of businesses. The authors argue that impact investments serve as a form of catalytic institutional work, expanding entrepreneurial opportunities for women and strengthening local institutions through knowledge transfer and strategic support. Moreover, the authors show that this effect is particularly pronounced in contexts with weak legal protections for women, where the marginal impact of private investment is most transformative. By contrast, where property rights for women are already strong, the additional impact of private investment diminishes, suggesting a substitution rather than a complementary relationship. The findings contribute to the literature on impact investing, institutional work and international business by highlighting the role of private financial actors in shaping gender-inclusive institutional environments. The study also has practical implications for investors and policymakers interested in promoting inclusive economic growth. Ultimately, the work positions impact investors as vital institutional actors capable of driving structural change in settings where formal legal protections may be lacking or underdeveloped.