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Green Bonds Drive Environmental Performance: Evidences from China

Author

Listed:
  • Xiaona Luo

    (School of Business, Macau University of Science and Technology, Macau 999078, China
    School of Accounting, Guangzhou Xinhua University, Guangzhou 510520, China)

  • Chan Lyu

    (School of Business, Macau University of Science and Technology, Macau 999078, China)

Abstract

Faced with the urgent challenge of global warming, green bonds play an important role in promoting economic transformation and improving environmental quality by financing environmentally friendly projects. However, the actual effects of green bonds, especially their impact on corporate environmental performance, and the mechanisms behind it, still need to be studied and validated. Based on the time-varying difference-in-differences (DID) model, this study uses 85 Chinese A-share listed companies that have issued green bonds from 2013 to 2022, to study the impact of green bond issuance on corporate environmental performance and the potential mechanisms. The results show that green bonds issuance effectively promotes the improvement of corporate environmental performance; this promotion is more significant for labor-intensive enterprises, larger enterprises, and enterprises with more government subsidies. In terms of the influencing mechanism, R&D investment and green innovation play partial mediating roles, media attention and analyst attention play positive moderating roles. This study further validates and complements the signal theory of green bonds and makes relevant suggestions for the development of green bonds in China.

Suggested Citation

  • Xiaona Luo & Chan Lyu, 2024. "Green Bonds Drive Environmental Performance: Evidences from China," Sustainability, MDPI, vol. 16(10), pages 1-20, May.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:10:p:4223-:d:1396707
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