Abstract
The green bond market has been growing rapidly worldwide since its debut in 2007. We present the first empirical study on the announcement returns and real effects of green bond issuance by firms in 28 countries during 2007–2017. After compiling a comprehensive international green bond dataset, we document that stock prices positively respond to green bond issuance. However, we do not find a consistently significant premium for green bonds, suggesting that the positive stock returns around green bond announcements are not fully driven by the lower cost of debt. Nevertheless, we show that institutional ownership, especially from domestic institutions, increases after the firm issues green bonds. Moreover, stock liquidity significantly improves upon the issuance of green bonds. Overall, our findings suggest that the firm's issuance of green bonds is beneficial to its existing shareholders.
Original language | English |
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Article number | 101427 |
Journal | Journal of Corporate Finance |
Volume | 61 |
Early online date | 8 Dec 2018 |
DOIs | |
Publication status | Published - Apr 2020 |
Keywords / Materials (for Non-textual outputs)
- corporate social responsibility
- environmental social and governance (ESG)
- green bonds
- institutional ownership
- investor attention
- stock liquidity