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The Price of Trust: Greenium and Greenwashing in Asia’s Green Bond Markets

Author

Listed:
  • Alexander Dryden

    (Department of Economics, SOAS University of London)

  • Enrico Pulieri

    (Department of Economics, SOAS University of London)

Abstract

This study investigates whether bond certification in Asian green bond markets leads to larger “greeniums†compared to traditional debt instruments. Utilizing a dataset of 2,753 green bonds issued between 2014 and 2024, we employ coarsened exact matching (CEM), ordinary least squares (OLS), and quantile treatment effects (QTE) regressions to analyze secondary market pricing. Our findings reveal that certified green bonds in Asia achieve a “greenium†of 12 basis points, with lower volatility levels when compared to traditional debt instruments. In contrast, self-labeled bonds face yield penalties, reflecting investor concerns about greenwashing and the credibility of their environmental claims. Our findings further suggest that Asian green bond markets require more market leadership from governments and public institutions to develop a more effective and trustworthy green bond market.

Suggested Citation

  • Alexander Dryden & Enrico Pulieri, 2025. "The Price of Trust: Greenium and Greenwashing in Asia’s Green Bond Markets," Working Papers 266, Department of Economics, SOAS University of London, UK.
    • Handle: RePEc:soa:wpaper:266
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    File URL: https://www.soas.ac.uk/sites/default/files/2025-02/economics-wp266.pdf
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    More about this item

    Keywords

    Asia; Green Bonds; Greenswashing; Greenium; Climate Change;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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