Oil price shocks and green bond spreads: Evidence from China

Jingxin Li, Qiujun Lan, Xiangjin Wang and Linnan Ge

Economic Analysis and Policy, 2025, vol. 87, issue C, 178-190

Abstract: This study is to ascertain the implications of oil price shocks for Chinese green bond spreads. Green and non-green bonds of the same firm are matched in our analysis to clarify the link between oil shocks and green bonds is associated with their greenness. We find robust evidence that the green bond spreads widen compared to non-green bond spreads during oil demand shocks, whereas no significant performance difference is observed between green and non-green bonds during oil supply shocks. Further cross-sectional analysis reveals that the consequences of oil shocks on green bond yield spreads differ significantly among industries based on their oil use intensity and firms based on their greenness. Collectively, these findings offer new insights into the implications of oil shocks triggered by changes in demand and supply on green bond spreads.

Keywords: Structural oil price shocks; Green bond; Yield spreads (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:87:y:2025:i:c:p:178-190

DOI: 10.1016/j.eap.2025.06.007

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