Research on the impact of green bond issuance on the stock price of listed companies

Abstract

PurposeConsidering that listed companies are the main body of natural resource consumption and pollutant emission, this study aims to explore the stock price effect and source channels of green bond issuance of listed companies. This is extremely necessary to promote listed companies to actively fulfill their environmental responsibilities so as to achieve sustainable economic and social development.Design/methodology/approachIn this paper, the companies that issued green bonds in Shanghai and Shenzhen stock markets in China from 2016 to 2018 are used as samples. First of all, the authors adopt the event study method and match the two models to prove that there is a stock price effect in green bond issuance. Then, the authors introduce the general regression model to analyze the sources of the stock price effect of green bond issuance in detail through three channels: “financing cost,” “investor attention” and “fundamental.”FindingsIn the above three channels, the “investor attention” channel can well explain the stock price effect of green bond issuance. Meanwhile, the authors also find that the stock price effect of the subsequent issuance of green bonds is more significant than that of the first time, non-financial companies are more pronounced than financial companies, public issuance are more obvious than private issuance, state-owned companies are more notable than non-state-owned companies, small-scale companies are more evident than large-scale companies and companies with high equity concentration are clearer than those with low equity concentration.Originality/valueTaking China as the research object for the first time, this paper comprehensively employs the capital asset pricing model and Fama–French five-factor model to discuss the stock price effect of green bond issuance of listed companies. Secondly, this paper also studies whether the way of green bond issuance, the type and size of the company, as well as the degree of ownership concentration will have different effects on the stock prices of listed companies. The research results provide new ideas and methods for the stock price effect of green bond issuance.

Green Bonds, Investor Attention and Stock Market Reaction: Evidence from ASEAN Countries

“…However, such findings are not in line with Da et al (2015) and Bijl et al (2016), where the higher investor attention Tang and Zhang (2020) and Flammer (2021), where the issuance of green bonds gives a positive reaction to the market through rising stock prices because by issuing green bonds, companies signal that their companies are ready to commit to the green economy. However, such findings are consistent with Lebelle et al (2020) and Xi and Jing (2022), where the issuance of green bonds does not have a positive influence on stock market reactions but produces a negative a cumulative abnormal return.…”

The Impact of CSI SEEE Carbon Neutral Index Launched on Order Aggressiveness

“…Additionally, we extend the estimation window for robustness testing by including a broader timeframe. Specifically, we incorporate a one-week window around the event day (0), encompassing 5 trading days before (−5) and after (5), resulting in a total of 11 trading days, following Xi and Jing (2021). Considering the anticipated, immediate, and delayed effects of the event, as highlighted by Zou et al (2020), we conduct a comprehensive analysis to evaluate the short-term impact of the event on the sample company's returns.…”

Analyzing Trends in Green Financial Instrument Issuance for Climate Finance in Capital Markets

“…'Sustainable development', 'financial markets', 'green investment', 'green innovation', 'corporate social responsibility', 'environmental regulation', and 'China' words were also striking (Purkayastha and Sarkar 2021;Dong et al 2022;Chen et al 2022;Chi et al 2023;Huang and Lei 2021). The interdependence of green bonds and other financial markets, including the stock market, carbon, and conventional financial markets, has garnered attention, majorly in China (Ren et al 2022;Jiang et al 2022a;Su et al 2022;Naeem et al 2021;Elsayed et al 2022;Verma and Bansal 2023;Xi and Jing 2022;Mensi et al 2022). However, despite the analysis' slant toward green capital market products, 'green equity' and 'green equity indices' were uncommon and did not appear in the word cloud.…”