IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i23p6881-d293789.html
   My bibliography  Save this article

Green Bonds, Corporate Performance, and Corporate Social Responsibility

Author

Listed:
  • Xiaoguang Zhou

    (Donlinks School of Economics and Management, University of Science and Technology Beijing, Beijing 100083, China)

  • Yadi Cui

    (Donlinks School of Economics and Management, University of Science and Technology Beijing, Beijing 100083, China)

Abstract

Green bonds are a financial tool that has been vigorously promoted in the global green finance field in recent years. Since 2013, the global issuance of green bonds has seen explosive growth. China’s green bond market has made great progress, rising to the top tier of global rankings. In this paper, Chinese listed companies that issue green bonds are used as the research object to explore the impact of green bond issuance on companies, including the impact of the announcement of green bond issuance on companies’ stock prices, as well as the impact of green bond issuance on companies’ financial performance and corporate social responsibility (CSR). The empirical results indicate that announcements of green bonds issuance have a positive impact not only on companies’ stock prices, companies’ profitability, and operational performance, but also on innovation capacity, and can improve companies’ CSR. Overall, the issuance of green bonds has a positive impact on companies, can contribute to environmental improvement, promotes CSR and value creation, and helps to attract investors to some extent.

Suggested Citation

  • Xiaoguang Zhou & Yadi Cui, 2019. "Green Bonds, Corporate Performance, and Corporate Social Responsibility," Sustainability, MDPI, vol. 11(23), pages 1-27, December.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:23:p:6881-:d:293789
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/23/6881/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/23/6881/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Heyman, Fredrik & Sjoholm, Fredrik & Tingvall, Patrik Gustavsson, 2007. "Is there really a foreign ownership wage premium? Evidence from matched employer-employee data," Journal of International Economics, Elsevier, vol. 73(2), pages 355-376, November.
    2. Pokrivcak, J. & Michalek, J. & Ciaian, P., 2018. "The impact of producer organisations on farm performance: A case study of large farms in Slovakia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277485, International Association of Agricultural Economists.
    3. Jesús Crespo Cuaresma & Tapio Palokangas & Alexander Tarasyev (ed.), 2013. "Green Growth and Sustainable Development," Dynamic Modeling and Econometrics in Economics and Finance, Springer, edition 127, number 978-3-642-34354-4, July-Dece.
    4. Reboredo, Juan C., 2018. "Green bond and financial markets: Co-movement, diversification and price spillover effects," Energy Economics, Elsevier, vol. 74(C), pages 38-50.
    5. Sze Kim Chin & Nur Adiana Hiau Abdullah, 2013. "Announcements Effect of Corporate Bond Issuance and Its Determinants," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 7(1), March.
    6. Claude Serfati, 2000. "Globalised finance-dominated accumulation regime and sustainable development," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 3(1), pages 40-62.
    7. Berensmann, Kathrin & Dafe, Florence & Kautz, Miriam & Lindenberg, Nannette, 2016. "Green bonds: taking off the rose-coloured glasses," Briefing Papers 24/2016, German Institute of Development and Sustainability (IDOS).
    8. Stuart L. Hart & Gautam Ahuja, 1996. "Does It Pay To Be Green? An Empirical Examination Of The Relationship Between Emission Reduction And Firm Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 5(1), pages 30-37, March.
    9. Linh Pham, 2016. "Is it risky to go green? A volatility analysis of the green bond market," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 6(4), pages 263-291, October.
    10. Hachenberg, B. & Schiereck, D., 2018. "Are green bonds priced differently from conventional bonds?," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 109709, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    11. Madurika Nanayakkara & Sisira Colombage, 2019. "Do investors in Green Bond market pay a premium? Global evidence," Applied Economics, Taylor & Francis Journals, vol. 51(40), pages 4425-4437, August.
    12. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
    13. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 1-19.
    14. Gebhardt, William R. & Hvidkjaer, Soeren & Swaminathan, Bhaskaran, 2005. "Stock and bond market interaction: Does momentum spill over?," Journal of Financial Economics, Elsevier, vol. 75(3), pages 651-690, March.
    15. Abhyankar, Abhay & Dunning, Alison, 1999. "Wealth effects of convertible bond and convertible preference share issues: An empirical analysis of the UK market," Journal of Banking & Finance, Elsevier, vol. 23(7), pages 1043-1065, July.
    16. Haesen, Daniel & Houweling, Patrick & van Zundert, Jeroen, 2017. "Momentum spillover from stocks to corporate bonds," Journal of Banking & Finance, Elsevier, vol. 79(C), pages 28-41.
    17. John A Mathews & Sean Kidney, 2012. "Financing climate-friendly energy development through bonds," Development Southern Africa, Taylor & Francis Journals, vol. 29(2), pages 337-349, June.
    18. Li, Hui & Liu, Hong & Siganos, Antonios, 2016. "A comparison of the stock market reactions of convertible bond offerings between financial and non-financial institutions: Do they differ?," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 356-366.
    19. Yanqin Fan & Carlos A. Manzanares, 2017. "Partial identification of average treatment effects on the treated through difference-in-differences," Econometric Reviews, Taylor & Francis Journals, vol. 36(6-9), pages 1057-1080, October.
    20. Torsten Ehlers & Frank Packer, 2017. "Green bond finance and certification," BIS Quarterly Review, Bank for International Settlements, September.
    21. Olivier David Zerbib, 2019. "The effect of pro-environmental preferences on bond prices: Evidence from green bonds," Post-Print halshs-02008641, HAL.
    22. Febi, Wulandari & Schäfer, Dorothea & Stephan, Andreas & Sun, Chen, 2018. "The impact of liquidity risk on the yield spread of green bonds," Finance Research Letters, Elsevier, vol. 27(C), pages 53-59.
    23. Zerbib, Olivier David, 2019. "The effect of pro-environmental preferences on bond prices: Evidence from green bonds," Journal of Banking & Finance, Elsevier, vol. 98(C), pages 39-60.
    24. Vishaal Baulkaran, 2019. "Stock market reaction to green bond issuance," Journal of Asset Management, Palgrave Macmillan, vol. 20(5), pages 331-340, September.
    25. Dutordoir, Marie & Li, Hui & Liu, Frank Hong & Verwijmeren, Patrick, 2016. "Convertible bond announcement effects: Why is Japan different?," Journal of Corporate Finance, Elsevier, vol. 37(C), pages 76-92.
    26. Lewis, Craig M. & Rogalski, Richard J. & Seward, James K., 2001. "The long-run performance of firms that issue convertible debt: an empirical analysis of operating characteristics and analyst forecasts," Journal of Corporate Finance, Elsevier, vol. 7(4), pages 447-474, December.
    27. James W. Kolari & Seppo Pynnönen, 2010. "Event Study Testing with Cross-sectional Correlation of Abnormal Returns," The Review of Financial Studies, Society for Financial Studies, vol. 23(11), pages 3996-4025, November.
    28. Alessandro Borin & Michele Mancini, 2016. "Foreign direct investment and firm performance: an empirical analysis of Italian firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 705-732, November.
    29. Horváthová, Eva, 2010. "Does environmental performance affect financial performance? A meta-analysis," Ecological Economics, Elsevier, vol. 70(1), pages 52-59, November.
    30. Miller, Merton H & Rock, Kevin, 1985. "Dividend Policy under Asymmetric Information," Journal of Finance, American Finance Association, vol. 40(4), pages 1031-1051, September.
    31. Zhang, Yue-Jun & Peng, Yu-Lu & Ma, Chao-Qun & Shen, Bo, 2017. "Can environmental innovation facilitate carbon emissions reduction? Evidence from China," Energy Policy, Elsevier, vol. 100(C), pages 18-28.
    32. Jun Huang & Wei Hu & Guowei Zhu, 2018. "The Effect of Corporate Social Responsibility on Cost of Corporate Bond: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(2), pages 255-268, January.
    33. Daniel C. Esty & Michael E. Porter, 1998. "Industrial Ecology and Competitiveness: Strategic Implications for the Firm," Journal of Industrial Ecology, Yale University, vol. 2(1), pages 35-43, January.
    34. Michalek, Jerzy & Ciaian, Pavel & Pokrivcak, Jan, 2018. "The impact of producer organizations on farm performance: The case study of large farms from Slovakia☆," Food Policy, Elsevier, vol. 75(C), pages 80-92.
    35. Jinhua Cui & Hoje Jo & Haejung Na, 2018. "Does Corporate Social Responsibility Affect Information Asymmetry?," Journal of Business Ethics, Springer, vol. 148(3), pages 549-572, March.
    36. M. Chiesa & S. Barua, 2019. "The surge of impact borrowing: the magnitude and determinants of green bond supply and its heterogeneity across markets," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 9(2), pages 138-161, April.
    37. Chiang, Wen-Chyuan & Shang, Jennifer & Sun, Li, 2017. "Broad bond rating change and irresponsible corporate social responsibility activities," Advances in accounting, Elsevier, vol. 39(C), pages 32-46.
    38. Britta Hachenberg & Dirk Schiereck, 2018. "Are green bonds priced differently from conventional bonds?," Journal of Asset Management, Palgrave Macmillan, vol. 19(6), pages 371-383, October.
    39. Freeman, R. Edward & Liedtka, Jeanne, 1991. "Corporate social responsibility: A critical approach," Business Horizons, Elsevier, vol. 34(4), pages 92-98.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joao Leitao & Joaquim Ferreira & Ernesto Santibanez‐Gonzalez, 2021. "Green bonds, sustainable development and environmental policy in the European Union carbon market," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 2077-2090, May.
    2. Arif, Muhammad & Hasan, Mudassar & Alawi, Suha M. & Naeem, Muhammad Abubakr, 2021. "COVID-19 and time-frequency connectedness between green and conventional financial markets," Global Finance Journal, Elsevier, vol. 49(C).
    3. repec:hig:wpaper:101sti2019 is not listed on IDEAS
    4. Román Ferrer & Rafael Benítez & Vicente J. Bolós, 2021. "Interdependence between Green Financial Instruments and Major Conventional Assets: A Wavelet-Based Network Analysis," Mathematics, MDPI, vol. 9(8), pages 1-20, April.
    5. Li, Yanxi & Yu, Conghui & Shi, Jinyan & Liu, Yuanyuan, 2023. "How does green bond issuance affect total factor productivity? Evidence from Chinese listed enterprises," Energy Economics, Elsevier, vol. 123(C).
    6. Tiwari, Aviral Kumar & Aikins Abakah, Emmanuel Joel & Adekoya, Oluwasegun B. & Hammoudeh, Shawkat, 2023. "What do we know about the price spillover between green bonds and Islamic stocks and stock market indices?," Global Finance Journal, Elsevier, vol. 55(C).
    7. Jankovic, Irena & Vasic, Vladimir & Kovacevic, Vlado, 2022. "Does transparency matter? Evidence from panel analysis of the EU government green bonds," Energy Economics, Elsevier, vol. 114(C).
    8. Vasundhara Saravade & Olaf Weber, 2020. "An Institutional Pressure and Adaptive Capacity Framework for Green Bonds: Insights from India’s Emerging Green Bond Market," World, MDPI, vol. 1(3), pages 1-25, November.
    9. Kanamura, Takashi, 2021. "Risk Mitigation and Return Resilience for High Yield Bond ETFs with ESG Components," Finance Research Letters, Elsevier, vol. 41(C).
    10. Piñeiro-Chousa, Juan & López-Cabarcos, M.Ángeles & Caby, Jérôme & Šević, Aleksandar, 2021. "The influence of investor sentiment on the green bond market," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    11. Kristin Ulrike Löffler & Aleksandar Petreski & Andreas Stephan, 2021. "Drivers of green bond issuance and new evidence on the “greenium”," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(1), pages 1-24, March.
    12. Kanamura, Takashi, 2020. "Are green bonds environmentally friendly and good performing assets?," Energy Economics, Elsevier, vol. 88(C).
    13. Juan Camilo Mejía-Escobar & Juan David González-Ruiz & Giovanni Franco-Sepúlveda, 2021. "Current State and Development of Green Bonds Market in the Latin America and the Caribbean," Sustainability, MDPI, vol. 13(19), pages 1-25, September.
    14. Kocaarslan, Baris & Soytas, Ugur, 2023. "The role of major markets in predicting the U.S. municipal green bond market performance: New evidence from machine learning models," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    15. Bhutta, Umair Saeed & Tariq, Adeel & Farrukh, Muhammad & Raza, Ali & Iqbal, Muhammad Khalid, 2022. "Green bonds for sustainable development: Review of literature on development and impact of green bonds," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    16. Reboredo, Juan C. & Ugolini, Andrea & Aiube, Fernando Antonio Lucena, 2020. "Network connectedness of green bonds and asset classes," Energy Economics, Elsevier, vol. 86(C).
    17. Ana-Belén Alonso-Conde & Javier Rojo-Suárez, 2020. "On the Effect of Green Bonds on the Profitability and Credit Quality of Project Financing," Sustainability, MDPI, vol. 12(16), pages 1-19, August.
    18. Karel Janda & Binyi Zhang, 2021. "Attractiveness of Chinese Bonds Financing Climate and Environmental Projects," FFA Working Papers 4.007, Prague University of Economics and Business, revised 26 Apr 2022.
    19. Anh Huu Nguyen & Thinh Gia Hoang & Duy Thanh Nguyen & Loan Quynh Thi Nguyen & Duong Thuy Doan, 2023. "The Development of Green Bond in Developing Countries: Insights from Southeast Asia Market Participants," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(1), pages 196-218, February.
    20. Arif, Muhammad & Naeem, Muhammad Abubakr & Farid, Saqib & Nepal, Rabindra & Jamasb, Tooraj, 2022. "Diversifier or more? Hedge and safe haven properties of green bonds during COVID-19," Energy Policy, Elsevier, vol. 168(C).
    21. Chuc Anh Tu & Tapan Sarker & Ehsan Rasoulinezhad, 2020. "Factors Influencing the Green Bond Market Expansion: Evidence from a Multi-Dimensional Analysis," JRFM, MDPI, vol. 13(6), pages 1-14, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:23:p:6881-:d:293789. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.