Green bond issuance and trade credit access: Evidence from Chinese bond market

Xiao Dong Gan, Xiao Yu Zheng, Cong Cong Li and Gui Qin Zhu

Finance Research Letters, 2024, vol. 60, issue C

Abstract: The Chinese bond market has achieved rapid development and gained widespread social attention. This study constructed a sample of corporate bonds in China and tested the impact of green bond issuance on trade credit. We found supply chain spillovers from green bonds, with firms that issue green bonds receiving more trade credit than firms that issue credit bonds. Results remain robust after the propensity score matching, entropy balancing, and instrumental variable approaches to mitigate endogeneity issues. Information asymmetry and social trust can enhance the impact of green bonds on trade credit. The spillover effects are more pronounced among unlisted companies, companies with higher bond ratings, non-polluting industries, and state-owned companies. This study provides insights into the role of green bonds in reducing information asymmetry and enhancing mutual trust in the supply chain.

Keywords: Green bond; Trade credit; Supply chain spillovers; Signaling; Environmental commitments (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:60:y:2024:i:c:s154461232301214x

DOI: 10.1016/j.frl.2023.104842

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