The value of external reviews in the secondary green bond market

Nagihan Simeth

Finance Research Letters, 2022, vol. 46, issue PA

Abstract: In the green bond market, bond issuers can obtain various types of external reviews to validate their green claims. This paper examines the impact of external reviews in the form of verification, second party opinion (SPO), and green bond rating on the yield spread between a green bond and a paired conventional bond in the secondary green bond market. We perform coarsened exact matching, followed by regression analysis. The results of our analysis show that external reviews are effective signaling tools for issuers in the financial industry, and an SPO most effectively signals the credibility and quality of greenness information.

Keywords: Green bond; Bond yield; External review; Information asymmetry (search for similar items in EconPapers)
JEL-codes: G12 G14 G19 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003378

DOI: 10.1016/j.frl.2021.102306

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