IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v45y2024i2p843-859.html
   My bibliography  Save this article

The way to induce asset‐backed securities participation in eco‐compensation

Author

Listed:
  • Gong Zhang
  • Shulei Bi

Abstract

By establishing an ecology compensation asset securitization project, market mechanisms can be used to regulate the interests of stakeholders in ecological conservation. Previous studies have shown that combining asset securitization with environmental protection can effectively promote the sustainable development of both economy and environment. However, there is still a lack of research on the stable mechanisms and impact of integrating ecology compensation and asset securitization. In this study, we propose a comprehensive operating model for ecology compensation asset securitization and a specific valuation framework supported by a multi‐period, multi‐state Markov model for ecology compensation asset securitization. If the project's net present value is positive, it can effectively reduce the risks of ecology compensation projects and increase the return rate of ecology compensation asset securitization projects. By employing the case study of ZhongHang ShouGang Green Energy (SZ:180801) and implementing the asset pool valuation using the multi‐state Markov model, the deviation error is 0.89%, validating the effectiveness of the model. Additionally, sensitivity analysis from simulation results indicates that changes in interest rates and default probabilities are the main factors influencing the valuation of the asset pool. After summarizing the research conclusions, relevant policy recommendations and future prospects are presented. This research aims to provide reference for the development and application of ecology compensation asset securitization.

Suggested Citation

  • Gong Zhang & Shulei Bi, 2024. "The way to induce asset‐backed securities participation in eco‐compensation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(2), pages 843-859, March.
  • Handle: RePEc:wly:mgtdec:v:45:y:2024:i:2:p:843-859
    DOI: 10.1002/mde.4036
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.4036
    Download Restriction: no

    File URL: https://libkey.io/10.1002/mde.4036?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
    ---><---

    References listed on IDEAS

    as
    1. Josephson, Jens & Shapiro, Joel, 2020. "Credit ratings and structured finance," Journal of Financial Intermediation, Elsevier, vol. 41(C).
    2. Xia, Yu, 2023. "Role of stock market return and natural resources utilisation on green economic development: Empirical evidence from China," Resources Policy, Elsevier, vol. 81(C).
    3. Marco Di Maggio & Amir Kermani & Christopher J Palmer, 2020. "How Quantitative Easing Works: Evidence on the Refinancing Channel," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(3), pages 1498-1528.
    4. Katerina Ivanov, 2022. "Credit enhancement mechanism in loan securitization and its implication to systemic risk," Review of Financial Economics, John Wiley & Sons, vol. 40(4), pages 418-437, October.
    5. Didi Rao & Jiaran Wang & Moucheng Liu & Nan Ma & Zhidong Li & Yunxiao Bai, 2022. "Research on Ecological Compensation of National Parks Based on Tourism Concession Mechanism," Sustainability, MDPI, vol. 14(11), pages 1-12, May.
    6. Taghizadeh-Hesary, Farhad & Yoshino, Naoyuki, 2019. "The way to induce private participation in green finance and investment," Finance Research Letters, Elsevier, vol. 31(C), pages 98-103.
    7. Cheng-Wen Lee & Andrian Dolfriandra Huruta, 2022. "Green Microfinance and Women’s Empowerment: Why Does Financial Literacy Matter?," Sustainability, MDPI, vol. 14(5), pages 1-13, March.
    8. Guangyou Zhou & Chen Liu & Sumei Luo, 2021. "Resource Allocation Effect of Green Credit Policy: Based on DID Model," Mathematics, MDPI, vol. 9(2), pages 1-18, January.
    9. Mirza, Afrasiab & Stephens, Eric, 2022. "Securitization and aggregate investment efficiency," Journal of Financial Intermediation, Elsevier, vol. 52(C).
    10. Lars Speckemeier & Dimitrios Tsivrikos, 2022. "Green Entrepreneurship: Should Legislators Invest in the Formation of Sustainable Hubs?," Sustainability, MDPI, vol. 14(12), pages 1-26, June.
    11. Wengerek, Sascha Tobias & Hippert, Benjamin & Uhde, André, 2022. "Risk allocation through securitization: Evidence from non-performing loans," The Quarterly Review of Economics and Finance, Elsevier, vol. 86(C), pages 48-64.
    12. Murray, Brian C. & Abt, Robert C., 2001. "Estimating price compensation requirements for eco-certified forestry," Ecological Economics, Elsevier, vol. 36(1), pages 149-163, January.
    13. Yuan, Jian & Yang, Ranran & Fu, Qiang, 2023. "Aspects of renewable energy influenced by natural resources: How do the stock market and technology play a role?," Resources Policy, Elsevier, vol. 85(PB).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lin, Boqiang & Pan, Ting, 2024. "Whether green credit is effecitve: a study based on stock market," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 261-274.
    2. Zuo, Zhenting & Cao, Rui & Teymurova, Vusala, 2024. "Unlocking natural resource potential: A balanced strategies for a fair and sustainable economic recovery," Resources Policy, Elsevier, vol. 89(C).
    3. Xiaowei Ding & Ruxu Jing & Kaikun Wu & Maria V. Petrovskaya & Zhikun Li & Alina Steblyanskaya & Lyu Ye & Xiaotong Wang & Vasiliy M. Makarov, 2022. "The Impact Mechanism of Green Credit Policy on the Sustainability Performance of Heavily Polluting Enterprises—Based on the Perspectives of Technological Innovation Level and Credit Resource Allocatio," IJERPH, MDPI, vol. 19(21), pages 1-26, November.
    4. Miklesh Yadav & Nandita Mishra & Shruti Ashok, 2023. "Dynamic connectedness of green bond with financial markets of European countries under OECD economies," Economic Change and Restructuring, Springer, vol. 56(1), pages 609-631, February.
    5. Kapoor, Supriya & Peia, Oana, 2021. "The impact of quantitative easing on liquidity creation," Journal of Banking & Finance, Elsevier, vol. 122(C).
    6. Sun, Haiyan & Chen, Fushan, 2022. "The impact of green finance on China's regional energy consumption structure based on system GMM," Resources Policy, Elsevier, vol. 76(C).
    7. Wenqi Luo & Jiexian Cheng, 2023. "Transition to sustainable business models for green economic recovery: role of financial literacy, innovation and environmental sustainability," Economic Change and Restructuring, Springer, vol. 56(6), pages 3787-3810, December.
    8. Gene Amromin & Jane K. Dokko & Karen E. Dynan, 2020. "Helping Homeowners During the Covid-19 Pandemic: Lessons from the Great Recession," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue 443, June.
    9. Satish Kumar & Dipasha Sharma & Sandeep Rao & Weng Marc Lim & Sachin Kumar Mangla, 2025. "Past, present, and future of sustainable finance: insights from big data analytics through machine learning of scholarly research," Annals of Operations Research, Springer, vol. 345(2), pages 1061-1104, February.
    10. Xiaomeng Zhao & Kangyin Dong & Jun Zhao & Qingzhe Jiang, 2024. "RETRACTED ARTICLE: Paths to sustainable development in China: why green finance and green technology matter?," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-26, April.
    11. Asger Lau Andersen & Niels Johannesen & Mia Jørgensen & José-Luis Peydró, 2020. "Monetary policy and inequality," Economics Working Papers 1761, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2021.
    12. Chen, Fu & Li, Fangfang & Xu, Jie & Sun, Yongtai & Li, Fangyuan, 2024. "Nexus between green credit efficiency and strategic, business and management digital transformation–based on 114 commercial banks in China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1242-1257.
    13. Moteng, Ghislain & Raghutla, Chandrashekar & Njangang, Henri & Nembot, Luc Ndeffo, 2023. "International sanctions and energy poverty in target developing countries," Energy Policy, Elsevier, vol. 179(C).
    14. Abakah, Emmanuel Joel Aikins & Tiwari, Aviral Kumar & Adekoya, Oluwasegun B. & Oteng-Abayie, Eric Fosu, 2023. "An analysis of the time-varying causality and dynamic correlation between green bonds and US gas prices," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    15. Francisco Gomes & Michael Haliassos & Tarun Ramadorai, 2021. "Household Finance," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 919-1000, September.
    16. Ge, Shilong & Luo, Xiaodan & Li, Yuangang & Zheng, Lanxing, 2024. "The impact of green credit policy on total factor productivity of enterprises," International Review of Economics & Finance, Elsevier, vol. 95(C).
    17. Manuel Adelino & Miguel A Ferreira & Mariassunta Giannetti & Pedro Pires, 2023. "Trade Credit and the Transmission of Unconventional Monetary Policy," The Review of Financial Studies, Society for Financial Studies, vol. 36(2), pages 775-813.
    18. Li, Jiaman & Dong, Xiucheng & Dong, Kangyin, 2022. "How much does financial inclusion contribute to renewable energy growth? Ways to realize green finance in China," Renewable Energy, Elsevier, vol. 198(C), pages 760-771.
    19. Kong, Qunxi & Shen, Chenrong & Li, Rongrong & Wong, Zoey, 2021. "High-speed railway opening and urban green productivity in the post-COVID-19: Evidence from green finance," Global Finance Journal, Elsevier, vol. 49(C).
    20. Taghizadeh-Hesary, Farhad & Yoshino, Naoyuki & Inagaki, Yugo & Morgan, Peter J., 2021. "Analyzing the factors influencing the demand and supply of solar modules in Japan – Does financing matter," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 1-12.

    More about this item

    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:wly:mgtdec:v:45:y:2024:i:2:p:843-859. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    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.