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Economic Change and Restructuring

Erschienen in:

14.06.2022

The price of frequent issuance: the value of information in the green bond market

verfasst von: Suk Hyun, Donghyun Park, Shu Tian

Erschienen in: Economic Change and Restructuring | Ausgabe 5/2023

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Abstract

Information asymmetry related to environmental impacts and greenwashing-related reputational risks poses a key challenge for green bond market development. Information enhancers-such as green labels, certifications, and external reviewers-help reduce information asymmetry, thereby lowering bond yields. This study examines whether frequent green bond issuance, as a new information channel, is priced in as frequent issuers offer greater information transparency and signal stronger environmental commitment. Using global green bond issuance from 2014 to 2019, we found that on average, infrequent green bond issuers pay 114–177 basis points more than frequent green bond issuers. Results from the Blinder-Oaxaca decomposition further show that 8 basis points of this yield difference cannot be explained by common pricing factors, partly reflecting the value of information. These findings show that green bond issuers can cost-efficiently convey information via frequent issuance. Policy makers should encourage frequent green bond issuance to lower information asymmetry, thereby boosting green investment and fostering green recovery.

Vorheriger Artikel Assessing stakeholder engagement in public spending, green finance and sustainable economic recovery in the highest emitting economies

Nächster Artikel Spillover effect among independent carbon markets: evidence from China’s carbon markets

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The numbers in parentheses represent the number of observations for MTN issuers among both infrequent and frequent issuers.

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Titel: The price of frequent issuance: the value of information in the green bond market
verfasst von: Suk Hyun
Donghyun Park
Shu Tian
Publikationsdatum: 14.06.2022
Verlag: Springer US
Erschienen in: Economic Change and Restructuring / Ausgabe 5/2023
Print ISSN: 1573-9414
Elektronische ISSN: 1574-0277
DOI: https://doi.org/10.1007/s10644-022-09417-0

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