Exploring Greenium and the Determinants of Green Bond Performance in Asia

Tita Nurvita, Noer Azam Achsani, Lukytawati Anggraeni, Marissa Malahayati and Tanti Novianti
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Tita Nurvita: School of Business IPB University (SB-IPB), Gedung SB-IPB Kampus IPB Gunung Gede, Jl. Raya Pajajaran, RT.03/RW.06, Bogor, West Java 16128, Indonesia
Noer Azam Achsani: School of Business IPB University (SB-IPB), Gedung SB-IPB Kampus IPB Gunung Gede, Jl. Raya Pajajaran, RT.03/RW.06, Bogor, West Java 16128, Indonesia
Lukytawati Anggraeni: Department of Economics, Faculty of Economics and Management, Jl. Agatis, Kampus IPB, Dramaga, Bogor, West Java 16680, Indonesia
Marissa Malahayati: World Bank, Indonesia Country Office, Indonesia Stock Exchange (IDX), Tower 2, 13th Floor, South Jakarta 12190, Indonesia4National Institute for Environmental Studies (NIES), 16-2 Onogawa, Tsukuba, Ibaraki 305-8506, Japan
Tanti Novianti: School of Business IPB University (SB-IPB), Gedung SB-IPB Kampus IPB Gunung Gede, Jl. Raya Pajajaran, RT.03/RW.06, Bogor, West Java 16128, Indonesia

Journal of Environmental Assessment Policy and Management (JEAPM), 2024, vol. 26, issue 04, 1-25

Abstract: This study examines the presence and determinants of the ‘greenium’ in Asian green bonds. The dataset includes green bonds issued by governments and corporations in Asian countries from 2016 to 2022. To analyse the determinants of the greenium, we applied a coarsened exact matching (CEM) model, an advanced form of the matching method. Ordinary least squares (OLS) regression was employed to assess the factors influencing the greenium. Our findings indicate that a greenium exists in green bonds issued in Asia, with significant effects observed in China, Korea, and Japan. Key drivers of the greenium include coupon rates, issuer type, oil prices, and the federal funds rate. This study contributes practical insights by highlighting that a greenium can be achieved through strategic project selection, transparent communication, and strong environmental commitment. Additionally, investors should account for coupon rates, issuer sector, and macroeconomic factors such as oil prices and the federal funds rate when investing in green bonds.

Keywords: Green bond; greenium; investor decision; investor taste; coarsened exact matching (CEM) (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S1464333224500157

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