Investigating Factors Affecting Institutional Investors’ Green Bond Investments: Cases for Beijing and Shenzhen

Yoshihiro Zenno () and Kentaka Aruga
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Yoshihiro Zenno: Graduate School of Humanities and Social Sciences, Saitama University, 255 Shimo-Okubo, Sakura-ku, Saitama 338-8570, Japan

Sustainability, 2023, vol. 15, issue 6, 1-16

Abstract: We conducted a survey of institutional investors in Beijing and Shenzhen to analyze the factors affecting green bond (GB) investing in China, such as credit rating, GB issuer, fund use, liquidity, redemption term, certification label, and type of currency. We then compared the results for Beijing and Shenzhen, including factors that affected greenium and the two cities’ willingness to pay (WTP). Using a double-bounded dichotomous choice contingent valuation method, we find that higher credit ratings tend to increase Beijing investors’ WTP and that the use of GB proceeds affects Shenzhen investors’ WTP. We also find that investors place importance on the type of currency, length of redemption term, and liquidity when investing in GB, while the certification label does not have an impact on WTP. The WTP for GB was higher among Shenzhen investors than among Beijing investors. These findings provide important insights for the government and financial institutions to take the right action to expand the GB market and to establish a GB framework that induces the financial sector toward reducing greenhouse gas emissions.

Keywords: green bonds; greenium; willingness to pay; credit rating; China; Renminbi (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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