Reduced Profitability of Green Bond Issuance: Evidence from China

Yilin Cai, Meng Feng, Yueming (Lucy) Qiu and Yi David Wang

No 2026/082, IMF Working Papers from International Monetary Fund

Abstract: This paper uses a multi-time period difference-in-differences model to evaluate the effect of green bond issuance on the profitability of heavy-polluting enterprises listed on China's A-share market. Results reveal that the average treatment effect of green bond issuance on heavy-polluting firms’ ROE is significantly negative. Therefore, it suggests that green bond issuance requires issuing firms to give up a large amount of their profitability to develop green project and achieve green transformation. Heterogeneity analyses demonstrate that such issuance has a negative effect on firms’ profitability, which varies across different ownership, regions, and industries. Overall, these results are consistent with the concept that green bond issuance binds heavy-polluting companies to be more mindful of their polluting activities.

Keywords: Green Bond Issuance; Profitability; Heavy-polluting Firms; Heterogeneity; bond issuance; IMF working papers; Yilin Cai; heavy-polluting firm; Climate finance; Bonds; Corporate bonds; Climate change; Global (search for similar items in EconPapers)
Pages: 30
Date: 2026-04-10
New Economics Papers: this item is included in nep-ene
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=575400 (application/pdf)

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:imf:imfwpa:2026/082

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().