Drivers of green bond issuance and new evidence on the “greenium”

Kristin Ulrike Löffler, Aleksandar Petreski () and Andreas Stephan
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Kristin Ulrike Löffler: Jönköping University
Aleksandar Petreski: Jönköping University

Eurasian Economic Review, 2021, vol. 11, issue 1, No 1, 24 pages

Abstract: Abstract This paper examines whether a premium for green bonds, called “greenium”, found in previous studies, exists in primary and secondary bond markets. Using a universe of about 2000 green and 180,000 non-green bonds from 650 international issuers, we apply both propensity score matching and coarsened exact matching to determine a sample of conventional bonds that is most similar to the sample of green bonds. We find that green bonds have larger issue sizes and lower rated issuers, on average, compared to conventional bonds. The estimates show that the yield for green bonds is, on average, 15–20 basis points lower than that of conventional bonds, both on primary and secondary markets, thus a “greenium” exists.

Keywords: Green bonds; Matching; CEM; Yield spread (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (34)

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DOI: 10.1007/s40822-020-00165-y

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