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The pricing of green bonds: Does social capital matter? Evidence from China

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  • Chen, Hao
  • Meng, Yijun
  • Ning, Xueping
  • Qi, Yuanbo

Abstract

This paper examines the relation between the level of regional societal trust and the cost of green bonds. We conduct empirical estimation on 330 green bonds issued in China from 2016 to 2019, and find that a higher level of provincial societal trust can significantly reduce the spread premium of green bonds. Further investigation reveals that because generalized social capital can take the place of an individual's particular social capital, trust has a more pronounced effect on bond spread when the issuer's ultimate controller has a less extensive social network.

Suggested Citation

  • Chen, Hao & Meng, Yijun & Ning, Xueping & Qi, Yuanbo, 2024. "The pricing of green bonds: Does social capital matter? Evidence from China," Finance Research Letters, Elsevier, vol. 67(PA).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pa:s1544612324007864
    DOI: 10.1016/j.frl.2024.105756
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    More about this item

    Keywords

    Societal trust; Green bonds; Social network; Green development;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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