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Green bond issuance and climate change in developing countries: The role of political stability

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  • M N, Nikhil
  • Mishra, Shekhar
  • Bouri, Elie
  • Sandesh, M

Abstract

This study examines the impact of green bond issuance on climate change in developing countries, focusing on the moderating role of political stability. Green bond issuance is linked to lower carbon emissions, and political stability strengthens this effect, possibly by supporting long-term policy commitment, reducing investment risk, and enabling green bond financing to translate more effectively into carbon reductions. These results are robust across various model estimators and alternative measures of the main dependent and independent variables. To maximize environmental impact in climate-vulnerable economies, it is thus essential to integrate green finance initiatives with strong governance and transparent reporting.

Suggested Citation

  • M N, Nikhil & Mishra, Shekhar & Bouri, Elie & Sandesh, M, 2026. "Green bond issuance and climate change in developing countries: The role of political stability," Finance Research Letters, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:finlet:v:90:y:2026:i:c:s1544612325026406
    DOI: 10.1016/j.frl.2025.109391
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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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