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Green bond in China: An effective hedge against global supply chain pressure?

Author

Listed:
  • Kong, Fanna
  • Gao, Zhuoqiong
  • Oprean-Stan, Camelia

Abstract

Investigating green bonds' hedging ability against global supply chain disruptions is crucial to maximising investment returns. This analysis innnovatively uses the sub-sample technique to recognise the time-dependant transmission mechanism between green bonds in China (CGB) and global supply chain pressure (GSCP), which further resolves if China's green bond is an effective hedge against global supply chain pressure. The conclusion ascertains that positive and negative impacts exist from GSCP to CGB, whereas the favourable one suggests that China's green bond is an effective hedge under high global supply chain stresses. However, an adverse effect indicates that low GSCP might accompany the development of a green bond market due to climate and environmental policies. In turn, GSCP is positively and negatively affected by CGB, and the favourable one reveals that the green bond market in China could reflect the condition of the global supply chain, but the adverse one cannot draw a similar conclusion. Under the background of the complex international economic situation and China's proposed carbon peaking and carbon neutrality goals, this discussion would provide significant suggestions for the public, enterprise and country.

Suggested Citation

  • Kong, Fanna & Gao, Zhuoqiong & Oprean-Stan, Camelia, 2023. "Green bond in China: An effective hedge against global supply chain pressure?," Energy Economics, Elsevier, vol. 128(C).
    • Handle: RePEc:eee:eneeco:v:128:y:2023:i:c:s0140988323006655
    DOI: 10.1016/j.eneco.2023.107167
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    Keywords

    Green bond; Global supply chain pressure; Hedging ability; Time-varying; China;
    All these keywords.

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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