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Do green bonds affect stock returns and corporate environmental performance? Evidence from China

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  • Fan, Ruixin
  • Xiong, Xiong
  • Li, Youwei
  • Gao, Ya

Abstract

We reveal the positive short-term stock market reaction to the announcement of green bond issuance, which does not exist for factual green bonds. For long-term performance, green bond issuance promotes corporate environmental information disclosure and attracts green investors.

Suggested Citation

  • Fan, Ruixin & Xiong, Xiong & Li, Youwei & Gao, Ya, 2023. "Do green bonds affect stock returns and corporate environmental performance? Evidence from China," Economics Letters, Elsevier, vol. 232(C).
    • Handle: RePEc:eee:ecolet:v:232:y:2023:i:c:s0165176523003476
    DOI: 10.1016/j.econlet.2023.111322
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    References listed on IDEAS

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    1. Pascual Berrone & Andrea Fosfuri & Liliana Gelabert, 2017. "Does Greenwashing Pay Off? Understanding the Relationship Between Environmental Actions and Environmental Legitimacy," Journal of Business Ethics, Springer, vol. 144(2), pages 363-379, August.
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    4. Yan, Yumeng & Xiong, Xiong & Li, Shuo & Lu, Lei, 2022. "Will temperature change reduce stock returns? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 81(C).
    5. Azi Ben-Rephael & Zhi Da & Ryan D. Israelsen, 2017. "It Depends on Where You Search: Institutional Investor Attention and Underreaction to News," The Review of Financial Studies, Society for Financial Studies, vol. 30(9), pages 3009-3047.
    6. Tang, Dragon Yongjun & Zhang, Yupu, 2020. "Do shareholders benefit from green bonds?," Journal of Corporate Finance, Elsevier, vol. 61(C).
    7. Pástor, Ľuboš & Stambaugh, Robert F. & Taylor, Lucian A., 2022. "Dissecting green returns," Journal of Financial Economics, Elsevier, vol. 146(2), pages 403-424.
    8. Xu, Xinkuo & Li, Jingsi, 2023. "Can green bonds reduce the carbon emissions of cities in China?," Economics Letters, Elsevier, vol. 226(C).
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    Cited by:

    1. Yu, Dan & Wang, Shenghu & Yi, Yuting & Ren, Yu, 2024. "The role of fintech, natural resources and trade policy uncertainty towards SDGs in China: New insights from nonlinear approach," Resources Policy, Elsevier, vol. 91(C).
    2. Zhang, Yuyao & Li, Yinuo & Chen, Xingyu, 2024. "Does green bond issuance affect stock price crash risk? Evidence from China," Finance Research Letters, Elsevier, vol. 60(C).
    3. Hau, Liya & Yang, Xiaomei & Zhang, Yongmin, 2024. "Multiscale quantile dependence between China's green bond and green equity: Fresh evidence from higher-order moment perspective," International Review of Financial Analysis, Elsevier, vol. 95(PB).

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    More about this item

    Keywords

    Green bond issuance; Factual green bonds; Market reaction; Environmental information disclosure; Green investors;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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