Measuring the Impact of Impact Measurement

Impact measurement is central to impact investing and social entrepreneurship, yet little is known about whether firms benefit privately from measuring impact. We conduct the first randomized controlled trial of an impact measurement intervention among high-growth social enterprises in India. Treated firms exhibit nearly twice as much revenue growth and raise nearly twice as much capital as control firms. In a companion experiment with early-stage investors, we find that investors respond strongly to quantified impact metrics but not to generic qualitative impact statements. Together, our results show that impact measurement can shape firm growth and capital allocation.