Abstract
Expansion of green bond markets as an appropriate way to lower environmental pollution is one of the most debatable issues among scholars. However, the expansion of this market is not a simple matter and depends on several factors. The main purpose of this study is to carry out a multi-dimensional analysis using the analytic hierarchy process (AHP) method to find and prioritize factors influencing the development of green bond markets. As a case, we do our analysis for Vietnam that, since the last years, has been trying to expand green bond market as an effective investment channel to finance low-carbon projects. The main findings revealed that legal infrastructure, official interest rate of green bonds, and economic stability are the most important factors directly affecting green bond market expansion. Therefore, economic and legal requirements should be addressed by policy makers. As major policy implications, we recommend an affordable price of green bonds and improvement of economic and financial stability to accelerate the development of green bond markets.
Highlights
Green bonds (GBs) are an important financial tool used to raise capital for low-carbon projects that benefit the environment (World Bank 2019; Tu et al 2020)
The findings showed that corporate performance and social responsibility to environmental issues positively affect the expansion of the green bond market
We determine the objective of our decision making as green bond market expansion in Vietnam
Summary
Green bonds (GBs) are an important financial tool used to raise capital for low-carbon projects that benefit the environment (World Bank 2019; Tu et al 2020). Despite the rapid growth of the green bond market because of its remarkable impacts on debt financial expenses and financial performances (Curley 2014; Tang and Zhang 2018; Flammer 2018; DeSchryver and Mariz 2020), the market expansion of green bonds in countries is a debatable issue among scholars. A number of scholars such as Voica et al (2015) and Partridge and Medda (2020) argue that private investors and public authorities are two important players in the green bond market, and these two players define the expansion level of green bond markets, while some studies believe in the impacts of different factors on development of green bond market. It is clear that green bond market expansion depends on various factors having an interrelationship and makes the development of green bond market multi-dimensional
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