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The influence of investor sentiment on the green bond market

Juan Piñeiro-Chousa, M.Ángeles López-Cabarcos, Jérôme Caby and Aleksandar Šević

Technological Forecasting and Social Change, 2021, vol. 162, issue C

Abstract: Stock market price prediction has improved due to social network activity since social networks can provide useful information, for example, on message sentiment. Few studies have analysed the influence of social networks on the bond market, and even fewer have specifically analysed the influence on the green bond market. By financing environmental projects that promote sustainability, green bonds are becoming increasingly important because of their relationship with major issues, such as climate change and water management. In addition, increases in people's environmental awareness have led companies to enact corporate social responsibility policies and environmentally sustainable projects. This context supports the relevance of this research because although there have been previous studies on green bonds, there is a scarcity of manuscripts that relate green bonds with social media and, more specifically, with investors’ sentiments. Therefore, using panel data analysis, the aim of this study is to analyze how the investor sentiment extracted from social networks influences the green bond market. The results of this manuscript should lead investors and markets to consider social networks as relevant sources of information not only for the equity market but also for the bond market, specifically the green bond market.

Keywords: Green bonds; Sentiment analysis; Climate change; Panel data analysis (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.techfore.2020.120351

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