Oil Price Shocks and Green Bonds: A Longitudinal Multilevel Model

Dina Azhgaliyeva, Ranjeeta Mishra and Zhanna Kapsalyamova
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Dina Azhgaliyeva: Asian Development Bank Institute
Ranjeeta Mishra: Asian Development Bank Institute

No 1278, ADBI Working Papers from Asian Development Bank Institute

Abstract: We investigate the impacts of crude oil price shocks on financial markets by examining the effect of oil price shocks on green bond issuance. Green bond issuance has been growing fast over the past several years; despite this, the share of green bonds in the total bonds remains small. Using the multilevel longitudinal random intercept and random coefficient models, we investigate the effect of disentangled crude oil price shocks on green bond issuance in the private sector. Unlike the general bond market, our empirical analysis finds that oil supply shocks affect green bond issuance positively. We also find that the public issuance of sovereign green bonds tends to promote the private issuance of green bonds. Our results are robust and hold when using alternative models; they also survive a range of robustness tests.

Keywords: green bonds; sovereign bonds; green finance; oil shock; policy support; crude oil price (search for similar items in EconPapers)
JEL-codes: G23 Q28 Q42 Q48 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2021-07
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (6)

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