IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v85y2025ipcs1544612325013133.html

The origin of greenium in China’s bond market: green preference or government support?

Author

Listed:
  • Ying, Qianwei
  • Peng, Xinyue
  • He, Siyi

Abstract

This study examines the determinants of greenium in China’s bond market. By analyzing green bonds issued from 2016 to 2024, our empirical results demonstrate that greenium primarily arises from government-backed labels. Mechanism tests show that labeled bonds secure fiscal subsidies and tax incentives, reflecting these bonds will bring about more government-oriented resources. Heterogeneity analysis indicates that labeled green bonds exhibit a significant greenium particularly after the dual-carbon policy implementation and when the bonds are held by institutional investors. Further test using a difference-in-difference approach reveals that the issuance of labeled green bonds can also narrow the spreads of regular bonds, which suggests that government support obtained through labeled green bonds helps mitigate the credit risk of issuers. This study highlights government support as the dominant force shaping greenium in China, which expands the research on green bond pricing.

Suggested Citation

  • Ying, Qianwei & Peng, Xinyue & He, Siyi, 2025. "The origin of greenium in China’s bond market: green preference or government support?," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s1544612325013133
    DOI: 10.1016/j.frl.2025.108055
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325013133
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.108055?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:eee:finlet:v:85:y:2025:i:pc:s1544612325013133. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    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.