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Building institutional legitimacy in impact investing: Strategies and gaps in financial communication and discourse

Othmar M. Lehner (Said Business School, University of Oxford, Oxford, UK)
Theresia Harrer (Middlesex University, London, UK)
Madeleine Quast (Fachhochschule Oberosterreich Fakultat fur Management, Steyr, Austria)

Journal of Applied Accounting Research

ISSN: 0967-5426

Article publication date: 3 June 2019

Issue publication date: 22 November 2019




Impact investing denominates an investment logic that combines social and environmental goals, financial returns as well as personal values. The purpose of this paper is to consider the concept of legitimacy to be an appropriate way to understand how actors in the impact investing market influence discourse in order to overcome the inherent liability of newness – based on hybrid institutional logics – through their financial and non-financial communication.


Based on two theoretically defined sets of codes, a thematic discourse analysis is conducted by analysing meaningful units derived from documents produced by case-selected actors in the impact investing industry, which are then categorised into rhetorical strategies for legitimacy building.


The paper finds that actors use diverse legitimisation strategies based on their relative positioning in the impact investing market. These strategies determine the actors’ main discursive foci and, in turn, are affected by the overall organisational activities, governance and mission. This study proposes and discusses eight legitimacy creating strategies of relevant archetypes of impact investing actors in their financial and non-financial communication. Following these interconnected discursive engagements, a communication gap can be demonstrated between investors, intermediaries and social entrepreneurs.


Such discursive engagement gaps can provide a theoretical lens to explain the almost non-functional market and, as practical implications, show the need for convergence and harmonisation in financial and non-financial reports and communiques. This research further contributes to theory by providing insights into the discursive creation of legitimacy, and by promoting a better understanding of the emerging field of impact investing.



Lehner, O.M., Harrer, T. and Quast, M. (2019), "Building institutional legitimacy in impact investing: Strategies and gaps in financial communication and discourse", Journal of Applied Accounting Research, Vol. 20 No. 4, pp. 416-438.



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