Corporate Green Bond Issuances: An International Evidence

Martin Lebelle, Souad Lajili Jarjir and Syrine Sassi
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Martin Lebelle: Institut de Recherche en Gestion, Université Paris-Est, IRG (EA 2354), UPEC, UPEM, F-94000 Créteil, France
Souad Lajili Jarjir: Institut de Recherche en Gestion, Université Paris-Est, IRG (EA 2354), UPEC, UPEM, F-94000 Créteil, France
Syrine Sassi: Finance, Economics and Law Department, South Champagne Business School, 10000 Troyes, France

JRFM, 2020, vol. 13, issue 2, 1-21

Abstract: Using an international sample of corporate Green bond issuances over the recent period, this paper highlights the potential consequences of the issuance of a Green bond on the issuer’s financial performance. Starting with a first sample of 2079 Green bond issuances of 190 unique issuers from 2009 to 2018, we investigate only corporate green bond issuances. Our final sample contains 475 green bonds issued by 145 unique firms. We find that the market reacts negatively to the announcement of green bond issuances. In particular, results show that the stock market reacts on the day of the green bond announcement date and the day after, and that the cumulative abnormal return is between −0.5% and −0.2%, depending on the asset pricing model (CAPM, the 3-factor Fama and French models, and the 4-factor Carhart models). This effect is mainly noticeable at the first Green Bond issuance and in developed markets. Our results provide evidence that the investors react in the same manner for Green bonds as for conventional or convertible bonds. This evidence suggests that green debt offerings convey unfavorable information about the issuing firms.

Keywords: green bonds; green bond market; financial innovation; sustainable investment; event study (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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