Corporate Green Bond: Issuance and Equity Market Reaction

Rachele Camacci ()
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Rachele Camacci: Catholic University of the Sacred Heart

Chapter Chapter 10 in Climate Change Adaptation, Governance and New Issues of Value, 2022, pp 227-249 from Palgrave Macmillan

Abstract: Abstract This chapter focuses on corporate green bond, an innovative financial instrument for climate and environmental financing. An empirical analysis has been developed in order to investigate stock market reaction to a company’s announcement of corporate green bond issuance. This study takes into consideration a dataset of corporate green bonds issued by European public firms starting from January 1, 2013, to December 31, 2019. Specifically, results show a positive and significant stock price reaction to corporate green bond issuance announcement. The overall price increase corresponds to a cumulative average abnormal return value of 0.41%. This first empirical evidence has been confirmed through a regression model resulting in the green label variable being positive and statistically significant. This analysis contributes to the existing literature providing empirical evidence on the efficiency of green bonds as they generate a positive impact on the environment and also have a positive effect on corporate financial performance.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psifcp:978-3-030-90115-8_10

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DOI: 10.1007/978-3-030-90115-8_10

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