Investor networks and social innovation: A stakeholder network analysis of Social Impact Bonds

Abstract

Social Impact Bonds (SIBs) have emerged as a novel paradigm within social finance, harnessing private capital to address social issues. This collaborative model convenes diverse stakeholders, including government agencies, service providers, and investors, to achieve predefined social outcomes linked to financial returns. A core component of SIBs is the investor network, which encompasses institutional investors, philanthropists, and impact investors. This network plays a key role in influencing project financing, intervention strategies, and governance structures. This study leverages stakeholder network theory to explore these dynamics. By applying network analysis, we map out how stakeholders interact, depend on one another, and share information. We analyse metrics like centrality and clustering to understand how the network structure impacts investor behaviour and project success. Our findings show that investors with higher betweenness centrality have a greater influence, linked to improved project performance and stronger social impact outcomes. This research offers fresh evidence of how network dynamics affect SIB results, providing valuable insights for improving investor involvement and network efficiency in future social finance projects.