Greenwashing and credit spread: Evidence from the Chinese green bond market

Guoquan Xu, Nuotian Lu and Yan Tong

Finance Research Letters, 2022, vol. 48, issue C

Abstract: This study analyzes how greenwashing affects green bond (GB) pricing. With a unique dataset, we empirically find that greenwashing does exist in the Chinese GB market, leading to higher credit spread compared to that of traditional bonds. However, green bonds with third-party certification have lower credit spread. Furthermore, the heterogeneity of trading venues and issuer ESG performance results in differential effects of third-party certification on GB credit spread. These findings enrich the understanding of green bond pricing and shed light on the development of the GB market.

Keywords: Greenwashing; Credit spread; Green bond; ESG; Fixed income securities (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001830

DOI: 10.1016/j.frl.2022.102927

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