Green bonds and environmental violations in financially constrained environments

Chaoyu Zhang

International Review of Economics & Finance, 2025, vol. 103, issue C

Abstract: This study examines the impact of green bonds on environmental violations and investigates how corporate financial constraints and environmental sensitivity moderate this relationship. Utilizing data from publicly traded firms in China from 2009 to 2023, this study employed logistic regression as the baseline regression and finds that green bonds negatively affect environmental violations, thereby introducing opportunities for value creation within firms. Further investigations reveal that the negative impact of green bonds on environmental violations is more pronounced in non-financially constrained and environmentally sensitive firms. To validate the robustness of this research, we employ different approaches including fixed effect, one year lag, two-stage Heckman test and the Generalized Method of Moments (GMM) to ascertain the uniformity of the results. The results have significant policy implications by emphasizing the importance of proactive environmental management in ensuring firms' access to green financing in emerging markets such as China.

Keywords: Green bonds; Environmental violations; Financial constraints; Environmental sensitivity; China (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056025004770
Full text for ScienceDirect subscribers only

Related works:
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:eee:reveco:v:103:y:2025:i:c:s1059056025004770

DOI: 10.1016/j.iref.2025.104314

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().