 The market reaction to green bond issuance: Evidence from ChinaJiazhen Wang, Xin Chen, Xiaoxia Li, Jing Yu and Rui Zhong () Pacific-Basin Finance Journal, 2020, vol. 60, issue C Abstract: This paper provides the first evidence of the debt and stock market reaction to corporate green bond issuance in the simultaneously largest developing economy and largest emerging debt market, China. Utilizing a most comprehensive sample of Chinese green bonds, we document a pricing premium of corporate green bonds relative to conventional bonds. The economic magnitude of the Chinese green bond pricing premium is greatly larger than that of an international green bond documented in prior studies. The pricing premium of corporate green bonds is most pronounced for new issues from high corporate social responsibility (CSR) issuers and underwriters. It is also stronger for corporate issuers with less ownership concentration and held by long-term institutional investors. Further analysis reveals positive announcement stock returns for green bond new issues, consistent with the stakeholder value maximization theory that corporate engagement in sustainable financing practice increases firm value in a long run and thus is favored by shareholders. Keywords: Green bonds; Bond underwriters; Social reputation; Stock market reaction (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:60:y:2020:i:c:s0927538x19305487 DOI: 10.1016/j.pacfin.2020.101294 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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