Determinants and Value Implications of Corporate ESG Bond Issuance: Evidence from South Korea

Boxian Wang, Jiyoon Lee and Hyejin Park ()
Additional contact information
Boxian Wang: Yonsei University, South Korea
Jiyoon Lee: Yonsei University, South Korea
Hyejin Park: Hanyang University ERICA, South Korea

Journal of Economic Development, 2024, vol. 49, issue 1, 21-42

Abstract: We examine the determinants of and investor responses to corporate environmental, social, and governance (ESG) bond issuance in Korea. We find that ESG bond issuance is positively associated with firm size and foreign ownership stakes. We also find that firms that establish ESG committees at the board level and those that are subject to carbon emission trading system are more likely to issue ESG bonds. Unlike prior studies that analyze green bond issuance in developed markets and China, we find no significant stock market reaction to ESG bond issuance in Korea, suggesting that the signaling effect of ESG bonds–in which companies credibly signal their commitment to ESG by issuing ESG bonds–does not exist. This paper suggests that enhanced ESG bond standards, post-issuance reporting, and verification procedures are needed in the Korean ESG bond market.

Keywords: ESG Bond; Corporate Social Responsibility (CSR); Signaling (search for similar items in EconPapers)
JEL-codes: G30 G32 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://jed.cau.ac.kr/archives/49-1/49-1-2.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:jecdev:0078

Access Statistics for this article

Journal of Economic Development is currently edited by Sung Y. Park

More articles in Journal of Economic Development from The Economic Research Institute, Chung-Ang University Room 1040, Building 310, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu, Seoul 06974, South Korea. Contact information at EDIRC.
Bibliographic data for series maintained by Tram Nguyen ().