Clusters of Social Impact Firms: A Complex Network Approach

With increasing interest around social impact investments, there is a pressing need to properly define the universe of social impact targets. This paper aims to identify communities of social impact firms (SIFs) ranked in terms of their compliance with the OECD criteria for impact investing. We include in the analysis the network dimension of the firms. Specifically, we assume that SIFs represent the nodes of a weighted complex network, whose weights grow when the linked nodes show similar behaviors in pursuing social impact targets. To empirically validate our model, we used a novel hand-collected dataset of SIFs across multiple countries. Our results highlight that the economic sector and country of origin do not act as a distinguishing factor among SIF communities. However, firm size seems to matter as firms which are more compliant with the social impact criteria tend to be smaller.