Does green bond issuance affect stock price crash risk? Evidence from China

Yuyao Zhang, Yinuo Li and Xingyu Chen

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

Abstract: This paper investigates the impact of green bond issuance on stock price crash risk and the mediating roles of information asymmetry and financing constraints by utilizing data of Chinese listed firms from 2014 to 2021. It is empirically tested that green bond issuance can significantly reduce stock price crash risk based on difference-in-differences (DID) methods. Our mechanism analysis shows that green bond issuance decreases stock price crash risk by addressing information asymmetry and alleviating financing constraints. Moreover, the reduction effect is more pronounced among firms in polluting industries and firms with non-SOEs ownership types. This paper provides a new perspective on stock market risk prevention.

Keywords: Green bond issuance; Stock price; Firm risk; Information asymmetry (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:60:y:2024:i:c:s1544612323012801

DOI: 10.1016/j.frl.2023.104908

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