IDEAS home Printed from https://ideas.repec.org/a/gam/jadmsc/v16y2026i6p295-d1970575.html

Do Conventional Bonds Respond More Strongly to ESG Information than Green Bonds? Evidence from China

Author

Listed:
  • Alexios Kythreotis

    (PEAK Innovation Center, School of Business Administration and Digital Technologies, European University Cyprus, Nicosia 2404, Cyprus)

  • Di Zhou

    (PEAK Innovation Center, School of Business Administration and Digital Technologies, European University Cyprus, Nicosia 2404, Cyprus
    Administrative Management, Qiqihar University, Qiqihar 161000, China)

  • Liběna Černohorská

    (Institute of Economic Sciences, University of Pardubice, 53210 Pardubice, Czech Republic)

  • Tomáš Fišera

    (Institute of Economic Sciences, University of Pardubice, 53210 Pardubice, Czech Republic)

  • Bernard Vaníček

    (Institute of Economic Sciences, University of Pardubice, 53210 Pardubice, Czech Republic)

  • Kyriakos Christofi

    (PEAK Innovation Center, School of Business Administration and Digital Technologies, European University Cyprus, Nicosia 2404, Cyprus)

Abstract

This study examines the relationship between Environmental, Social, and Governance (ESG) performance and financing and pricing outcomes in green and conventional bond markets in China over the period of 2017–2024. Drawing on signaling theory, information asymmetry theory, and market segmentation theory, the study argues that the role of ESG performance differs across bond types because green and conventional bonds operate within different institutional and informational environments. Using a comparative analysis of green and conventional bonds, the findings show that ESG performance is more strongly and consistently associated with conventional bond characteristics, particularly in relation to issuance amount, yield to maturity, and credit spreads. In contrast, ESG effects in green bonds are weaker and less consistent, suggesting that investors place greater emphasis on certification mechanisms, environmental project objectives, and sustainability-related bond characteristics than on broader issuer-level ESG disclosures. The findings also suggest that ESG information does not affect all debt instruments in the same way or always functions as a purely risk-reducing signal. In the Chinese market, stronger ESG exposure may also be associated with transition risks, regulatory pressures, and sector-specific sustainability challenges, particularly in conventional bond markets. Overall, the results indicate that the financial relevance of ESG performance depends not only on firm characteristics but also on the institutional and informational environment of the financial instrument itself. The findings remain robust across alternative model specifications and sensitivity analyses, providing additional confidence in the reported differences between green and conventional bond markets. The study contributes to the sustainable finance literature by showing that the pricing relevance of ESG information is instrument-specific rather than uniform across debt markets. It also provides practical implications for regulators, investors, and issuers by highlighting the importance of disclosure quality, transparency standards, and external verification mechanisms in strengthening investor confidence and reducing potential greenwashing risks in sustainable finance markets.

Suggested Citation

  • Alexios Kythreotis & Di Zhou & Liběna Černohorská & Tomáš Fišera & Bernard Vaníček & Kyriakos Christofi, 2026. "Do Conventional Bonds Respond More Strongly to ESG Information than Green Bonds? Evidence from China," Administrative Sciences, MDPI, vol. 16(6), pages 1-29, June.
  • Handle: RePEc:gam:jadmsc:v:16:y:2026:i:6:p:295-:d:1970575
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2076-3387/16/6/295/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2076-3387/16/6/295/
    Download Restriction: no
    ---><---

    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:gam:jadmsc:v:16:y:2026:i:6:p:295-:d:1970575. 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: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (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.