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Institutional Investors’ Willingness to Pay for Green Bonds: A Case for Shanghai

Author

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  • Yoshihiro Zenno

    (Graduate School of Humanities and Social Sciences, Saitama University, 255 Shimo-Okubo, Sakura-ku, Saitama 338-8570, Japan)

  • Kentaka Aruga

    (Graduate School of Humanities and Social Sciences, Saitama University, 255 Shimo-Okubo, Sakura-ku, Saitama 338-8570, Japan)

Abstract

The issuance of green bonds has been increasing since 2016 in China, and the number of papers covering the topic is growing. In previous studies on greenium, not much has been investigated from the institutional investors’ perspective. The study estimates the institutional investors’ level of greenium by surveying the institutional investors in Shanghai, China, from October 23 to 1 November 2021, using the double-bound dichotomous choice (DBDC) contingent valuation method (CVM). The study also analyzes the effects of variables that are known to be important for the green bond based on previous studies. The study identifies that there is a greenium level of 0.47%. Among the seven variables tested with logit regression models, the credit and currency of the bond had a positive effect on the greenium. The study provides helpful insights for issuers’ strategic planning and could be a stepping stone to increasing issuance not only for the Chinese green bond market but also for the global green bond market.

Suggested Citation

  • Yoshihiro Zenno & Kentaka Aruga, 2022. "Institutional Investors’ Willingness to Pay for Green Bonds: A Case for Shanghai," JRFM, MDPI, vol. 15(11), pages 1-16, November.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:11:p:508-:d:962786
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    References listed on IDEAS

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    Cited by:

    1. Zenno, Yoshihiro & Aruga, Kentaka, 2023. "Investing the factors affecting green bond investments in China: Cases for Beijing and Shenzhen," MPRA Paper 116203, University Library of Munich, Germany.
    2. Yoshihiro Zenno & Kentaka Aruga, 2023. "Investigating Factors Affecting Institutional Investors’ Green Bond Investments: Cases for Beijing and Shenzhen," Sustainability, MDPI, vol. 15(6), pages 1-16, March.

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