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Green Bond Issuance Strategies: A Stackelberg Approach with Empirical Evidence from Europe

Author

Listed:
  • Riadh Ben Jelili

    (LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - UBS - Université de Bretagne Sud - UBO - Université de Brest - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

  • Olivier Adoukonou

    (LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - UBS - Université de Bretagne Sud - UBO - Université de Brest - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

  • Youssef Fahmi

    (LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - UBS - Université de Bretagne Sud - UBO - Université de Brest - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

Abstract

This study investigates the strategic decision-making processes involved in green bond issuance through a Stackelberg game-theoretic framework, integrating corporate social responsibility (CSR) drivers and social preferences. The model explores the interactions between a regulator, positioned as the leader, and firms as followers. The regulator establishes policy incentives to foster green bond issuance, while firms determine their issuance strategies considering regulatory backing, reputational gains, and peer influences. The framework incorporates firm heterogeneity, accounting for varied responses influenced by environmental exposure, governance quality, and macroeconomic contexts. A dynamic feedback mechanism is included, enabling regulators to refine incentives based on observed behaviors, thereby enhancing alignment with environmental objectives and economic priorities. Empirical analysis using data from 22 European countries (2013-2024) underscores the critical influence of institutional governance, environmental policy support, and carbon taxation in advancing green finance. The findings offer a robust framework for policymakers and firms, delivering practical insights to harmonize sustainability ambitions with economic goals.

Suggested Citation

  • Riadh Ben Jelili & Olivier Adoukonou & Youssef Fahmi, 2024. "Green Bond Issuance Strategies: A Stackelberg Approach with Empirical Evidence from Europe," Working Papers hal-04906526, HAL.
    • Handle: RePEc:hal:wpaper:hal-04906526
    Note: View the original document on HAL open archive server: https://hal.science/hal-04906526v1
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    More about this item

    Keywords

    Green bonds Stackelberg game Sustainable finance Governance quality Heckman model. JEL Codes: C72 D21 H23 Q58; Green bonds; Stackelberg game; Sustainable finance; Governance quality; Heckman model. JEL Codes: C72; D21; H23; Q58;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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