The DOI matches its Crossref record; 22 of the 22 references it cites were found in a registry or an index.
The Green Bonds Premium Puzzle: The Role of Issuer Characteristics and Third-Party Verification
Open accessAbstract
If we examine the characteristics of a sample of green bonds matched with their closest brown bond neighbors, we encounter a challenge. Green bonds have higher yields, lower variance, and are more liquid. The institutional/private issuer and the green third-party verification/non-verification breakdowns help explain this puzzle. Green bonds from institutional issuers have higher liquidity with respect to their brown bond correspondents and negative premia before correcting for their lower volatility. Green bonds from private issuers have much less favorable characteristics in terms of liquidity and volatility but have positive premia with respect to their brown correspondents, unless the private issuer commits to certify the “greenness” of the bond. An implication of our findings is that the issuer’s reputation or green third-party verifications are essential to reduce informational asymmetries, avoid suspicion of green (bond)-washing, and produce relatively more convenient financing conditions.
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Cites
Socially responsible investments: Institutional aspects, performance, and investor behavior
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Environmental risk management and the cost of capital
Sharfman, M. P., & Fernando, C. S. (2008) · Strategic Management Journal · doi:10.1002/smj.678 · Cited by 1,530
The effect of pro-environmental preferences on bond prices: Evidence from green bonds
Zerbib, O. D. (2019) · Journal of Banking & Finance · doi:10.1016/j.jbankfin.2018.10.012 · Cited by 1,379
Corporate Yield Spreads and Bond Liquidity
CHEN, L., LESMOND, D. A., & WEI, J. (2007) · The Journal of Finance · doi:10.1111/j.1540-6261.2007.01203.x · Cited by 1,078
Corporate bond liquidity before and after the onset of the subprime crisis
Dick-Nielsen, J., Feldhütter, P., & Lando, D. (2012) · Journal of Financial Economics · doi:10.1016/j.jfineco.2011.10.009 · Cited by 786
Green bond and financial markets: Co-movement, diversification and price spillover effects
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Are green bonds priced differently from conventional bonds?
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Cited by
Network connectedness of green bonds and asset classes
Reboredo, J. C., Ugolini, A., & Aiube, F. A. L. (2020) · Energy Economics · doi:10.1016/j.eneco.2019.104629 · Cited by 348
Drivers of green bond issuance and new evidence on the 'greenium'
Löffler, K. U., Petreski, A., & Stephan, A. (2021) · Eurasian Economic Review · doi:10.1007/s40822-020-00165-y · Cited by 156
Metadata
- Authors
- Bachelet, M. J., Becchetti, L., & Manfredonia, S.
- Venue
- Sustainability
- Publisher
- MDPI AG
- Published
- 2019-02-19
- Volume
- 11
- Issue
- 4
- Pages
- 1098
- ISSN
- 2071-1050 (ISSN-L)
- OpenAlex
- W2917965976
- Cited by
- 432
- References
- 22
- FWCI
- 50.93
- Type
- journal article
- Language
- en
- Open access
- gold
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
