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Corporate Green Bond Issuances: An International Evidence

Author

Listed:
  • Martin Lebelle

    (Institut de Recherche en Gestion, Université Paris-Est, IRG (EA 2354), UPEC, UPEM, F-94000 Créteil, France)

  • Souad Lajili Jarjir

    (Institut de Recherche en Gestion, Université Paris-Est, IRG (EA 2354), UPEC, UPEM, F-94000 Créteil, France)

  • Syrine Sassi

    (Finance, Economics and Law Department, South Champagne Business School, 10000 Troyes, France)

Abstract

Using an international sample of corporate Green bond issuances over the recent period, this paper highlights the potential consequences of the issuance of a Green bond on the issuer’s financial performance. Starting with a first sample of 2079 Green bond issuances of 190 unique issuers from 2009 to 2018, we investigate only corporate green bond issuances. Our final sample contains 475 green bonds issued by 145 unique firms. We find that the market reacts negatively to the announcement of green bond issuances. In particular, results show that the stock market reacts on the day of the green bond announcement date and the day after, and that the cumulative abnormal return is between −0.5% and −0.2%, depending on the asset pricing model (CAPM, the 3-factor Fama and French models, and the 4-factor Carhart models). This effect is mainly noticeable at the first Green Bond issuance and in developed markets. Our results provide evidence that the investors react in the same manner for Green bonds as for conventional or convertible bonds. This evidence suggests that green debt offerings convey unfavorable information about the issuing firms.

Suggested Citation

  • Martin Lebelle & Souad Lajili Jarjir & Syrine Sassi, 2020. "Corporate Green Bond Issuances: An International Evidence," JRFM, MDPI, vol. 13(2), pages 1-21, February.
    • Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:2:p:25-:d:316188
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    6. Danilo Liberati & Giuseppe Marinelli, 2022. "Everything you always wanted to know about green bonds (but were afraid to ask)," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Statistics for Sustainable Finance, volume 56, Bank for International Settlements.
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