Estimation of green bond premiums in the Chinese secondary market

Karel Janda, Anna Kortusova and Binyi Zhang

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: Green bonds have gained prominence in China’s capital market as tools that help to fuel the transition to a climate-resilient economy. Although the issuance volume in the Chinese green bond market has been growing rapidly in recent years, the impact of the green label on bond pricing has not been adequately studied. Therefore, this paper investigates whether the newly developed financial instrument offers investors in China an attractive yield compared to other equivalent conventional bonds. By matching green bonds with their conventional counterparts and subsequently applying a fixed-effects estimation, our empirical results reveal a significant negative green bond yield premium of -1.8 bps on average in the Chinese secondary market. In addition, the yield premium is found to vary across issuers’ business sectors mainly due to the public reputation of bond issuers. Moreover, our empirical results reveal an insignificant relationship between the green certification and the yield premium, possibly reflecting inconsistent green bond standards in the Chinese market. Our results point to some practical implications for policymakers and investors.

Keywords: Green Finance; Green bonds; ESG; China (search for similar items in EconPapers)
JEL-codes: G12 Q56 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2022-05
New Economics Papers: this item is included in nep-cna, nep-ene and nep-env
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cama.crawford.anu.edu.au/sites/default/fil ... ortusova_zhang_0.pdf (application/pdf)

Related works:
Journal Article: Estimation of green bond premiums On the Chinese secondary market (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2022-38

Access Statistics for this paper

More papers in CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University Contact information at EDIRC.
Bibliographic data for series maintained by Cama Admin ().