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Biodiversity, Governance, and Municipal Bonds

Author

Listed:
  • Yanghua Shi

    (International University of Japan)

Abstract

The paper shows that biodiversity-related regulatory changes significantly impact municipal bond yields. The paper also finds that certain local factors exacerbate this eect. The analysis exploits a series of statewide regulatory changes that alter the management of unowned cats, an invasive species widely associated with biodiversity loss. The study employs a state-border discontinuity approach, comparing municipal bond yields issued by counties aected by these statewide laws to those issued by nearby counties not subject to such laws. This paper provides one of the first empirical analyses of biodiversity-related regulatory shocks in financial markets. In doing so, it underscores the economic significance of biodiversity-related legislative measures and advances finance research that incorporates biodiversity.

Suggested Citation

  • Yanghua Shi, 2026. "Biodiversity, Governance, and Municipal Bonds," Working Papers EMS_2026_09, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2026_09
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    File URL: https://www2.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2026_09.pdf
    File Function: First version, 2026
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    Keywords

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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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