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Do Investors Get an Advantage from Corporate Green Bond Issuance? A Cross-Country Study

Author

Listed:
  • Riaz Tabassum

    (School of Business and Economics, Universiti Putra Malaysia, Serdang, Malaysia University of the Punjab Jhelum Campus, Pakistan)

  • Selamat Aslam Izah

    (School of Business and Economics, Universiti Putra Malaysia, Serdang, Malaysia)

  • Nor Normaziah Mohd

    (School of Business and Economics, Universiti Putra Malaysia, Serdang, Malaysia)

  • Hassan Ahmad Fahmi Sheikh

    (School of Business and Economics, Universiti Putra Malaysia, Serdang, Malaysia)

Abstract

This study examines the stock’s response to corporate green bond issuance announcements. Analyzing a dataset of 230 global corporate green bond issuers from 38 countries between 2013 and 2022 through an event study, the findings reveal a positive market reaction, especially within the non-financial corporate sector. Green bonds in this sector are primarily used to fund their own eco-friendly projects, signaling a commitment to environmental sustainability, and generating investor confidence. Variation in market reactions across countries is noted, with developed countries exhibiting a significantly more positive response. This suggests that environmental initiatives hold greater value in these regions, highlighting the alignment between sustainable practices and investor sentiment. These results emphasize the potential advantages of integrating green bonds and their environmental commitments into investment strategies, particularly for portfolio diversification and attracting investors seeking sustainable opportunities.

Suggested Citation

  • Riaz Tabassum & Selamat Aslam Izah & Nor Normaziah Mohd & Hassan Ahmad Fahmi Sheikh, 2025. "Do Investors Get an Advantage from Corporate Green Bond Issuance? A Cross-Country Study," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 35(2), pages 1-37.
    • Handle: RePEc:vrs:suvges:v:35:y:2025:i:2:p:1-37:n:1001
    DOI: 10.2478/sues-2025-0006
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    References listed on IDEAS

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    More about this item

    Keywords

    Green bonds; Signaling theory; Investor attention; Event study;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • 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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