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Green Bonds, Air Quality, and Mortality: Evidence from the People’s Republic of China

Author

Listed:
  • Luo, Yan

    (Fudan University)

  • Tian, Shu

    (Asian Development Bank)

  • Yang, Hao

    (Fudan University)

Abstract

In this paper, we examine whether and how green bond issuance affects local air quality and mortality rates in the People's Republic of China. We find that a 1 standard deviation increase in corporates’ green bond financing in a city is associated with a 0.6% reduction in local air pollution generally and an 0.8% reduction in PM2.5, which refers to tiny pollutant particles with a size of less than 2.5 microns. The effect is stronger when certified green bonds are examined and in cities with higher gross domestic product growth. Further, the green bond financing prevalence is also significantly and negatively associated with local mortality rates, which is consistent with our expectation that, by improving local air quality, green bond issuance helps to enhance local residents’ health. The findings are robust to the control of a set of potential determinants of air quality, and a series of robustness tests confirm that the effects are not simply driven by endogeneity.

Suggested Citation

  • Luo, Yan & Tian, Shu & Yang, Hao, 2021. "Green Bonds, Air Quality, and Mortality: Evidence from the People’s Republic of China," ADB Economics Working Paper Series 641, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0641
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    References listed on IDEAS

    as
    1. Tang, Dragon Yongjun & Zhang, Yupu, 2020. "Do shareholders benefit from green bonds?," Journal of Corporate Finance, Elsevier, vol. 61(C).
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    3. Krüger, Philipp, 2015. "Corporate goodness and shareholder wealth," Journal of Financial Economics, Elsevier, vol. 115(2), pages 304-329.
    4. Henri Servaes & Ane Tamayo, 2013. "The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness," Management Science, INFORMS, vol. 59(5), pages 1045-1061, May.
    5. Goss, Allen & Roberts, Gordon S., 2011. "The impact of corporate social responsibility on the cost of bank loans," Journal of Banking & Finance, Elsevier, vol. 35(7), pages 1794-1810, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    green bonds; air quality; mortality;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G19 - Financial Economics - - General Financial Markets - - - Other

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