An Institutional Pressure and Adaptive Capacity Framework for Green Bonds: Insights from India’s Emerging Green Bond Market

Vasundhara Saravade and Olaf Weber
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Vasundhara Saravade: School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, ON N2L 3G1, Canada
Olaf Weber: School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, ON N2L 3G1, Canada

World, 2020, vol. 1, issue 3, 1-25

Abstract: Although climate finance tools like green bonds have been gaining popularity in academia, the research has been limited to examining the financial viability and performance of this market. We explore a different research avenue related to institutional dynamics that are driving this market at the country level and shaping its adaptive capacity to climate change. Our paper introduces a new conceptual framework by linking institutional isomorphism with adaptive capacity dimensions in the green bond market. Using a mixed methods exploratory approach, we apply our institutional pressure-adaptive capacity framework to India’s green bond market. Our results show that different social actors, ranging from formal institutions like regulators and investors to informal ones like advocacy groups, can play a key role in shaping the legitimacy of this market. By highlighting ‘invisible’ social norms such as awareness about climate finance, changing regulatory priorities and the institutional strength of social actors, we contribute to the literature on this topic. We also introduce the concept of a high priority social actor and conclude that varying degrees of institutional pressure from such actors will ultimately decide the growth and legitimacy of this integral climate finance market at the country level as well as influence its adaptive capacity response to climate change.

Keywords: green bond market; India; social actors; adaptive capacity wheel; institutional theory (search for similar items in EconPapers)
JEL-codes: G15 G17 G18 L21 L22 L25 L26 Q42 Q43 Q47 Q48 R51 R52 R58 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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