The “Greenium” in Green Bonds: How Did It Change with COVID-19?

Mariantonietta Intonti, Laura Serlenga, Giovanni Ferri, Matteo De Leonardis and Giuseppe Starace ()
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Mariantonietta Intonti: Dipartimento di Economia e Finanza, Università degli Studi di Bari, 70124 Bari, Italy
Laura Serlenga: Dipartimento di Economia e Finanza, Università degli Studi di Bari, 70124 Bari, Italy
Matteo De Leonardis: Dipartimento di Management Finanza e Tecnologia, Università LUM “Giuseppe Degennaro”, 70010 Casamassima, Italy
Giuseppe Starace: Dipartimento di Management Finanza e Tecnologia, Università LUM “Giuseppe Degennaro”, 70010 Casamassima, Italy

Sustainability, 2023, vol. 15, issue 7, 1-17

Abstract: This paper focuses on the study of the “greenium”, i.e., the premium on Green Bonds (GBs) vs. Traditional Bonds (TBs) whereby investors accept lower yields of GBs vs. TBs, which is caused by the important difference between them with reference to their contribution to the green transition, specifically paying attention to the influence of the COVID-19 pandemic on it. The conjecture of this paper is that the negative shock of rates due to the pandemic crisis has increased the greenium, as it has also increased the interest in projects of the green transition. In addition, a hypothesis is made that the risk of breaking the green promises might be higher for corporations than for governments and, hence, that the greenium would be lower for corporate GBs than for government GBs. Finally, the possibility that the post-pandemic changes of the greenium might vary depending on individual GBs’ liquidity is considered. The empirical analyses provide support for the first two hypotheses but not for the third one.

Keywords: green bonds; greenium; corporate vs. government green bonds; COVID-19 pandemic shock (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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