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Green Bond Pricing and Its Determinant: Evidence from Chinese Secondary Market

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Regulation of Finance and Accounting (ACFA 2021, ACFA 2020)

Part of the book series: Springer Proceedings in Business and Economics ((SPBE))

Abstract

This paper investigates whether green bonds offer investors in China an attractive yield compared to other equivalent conventional bonds. By applying a matching method and, subsequently, fixed-effect estimation, our empirical results reveal a significant negative yield premium of green bonds on average—1.8 bps lower than that of their conventional counterparts in the Chinese secondary market. Furthermore, we find that green bond premiums vary across issuers’ business sectors, mainly due to the public reputation of bond issuers. We also show that bond credit rating and corporate ESG rating have a significant impact on green bond premiums. Our results point to some practical implications for policymakers and investors. 

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Acknowledgment

This paper is part of a project that has received funding from the European Union’s Horizon 2020 research and innovation program under Marie Sklodowska-Curie grant agreement No. 870245. Binyi Zhang acknowledges support from the Charles University Grant Agency (GAUK) under grant No. 862119. Karel Janda acknowledges support from the Czech Science Foundation (grant No.22-19617S). The views expressed here are those of the authors and not necessarily those of our institutions. All remaining errors are solely our responsibility.

Author information

Authors and Affiliations

  1. Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic

    Karel Janda & Binyi Zhang

  2. Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Prague, Czech Republic

    Karel Janda

Authors
  1. Karel Janda
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  2. Binyi Zhang
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Editors and Affiliations

  1. Faculty of Finance & Accounting, Prague University of Economics and Business, Prague, Czech Republic

    David Procházka

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Janda, K., Zhang, B. (2022). Green Bond Pricing and Its Determinant: Evidence from Chinese Secondary Market. In: Procházka, D. (eds) Regulation of Finance and Accounting. ACFA ACFA 2021 2020. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-99873-8_15

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