Green bond issuance and stock price informativeness

Abstract

This paper explores the relationship between green bond issuance and stock price informativeness (SPI) from the perspective of green finance. Based on the green bond issuance data of listed firms in China, we use the difference-in-differences model to test the impact of green bond issuance on SPI. We find that green bond issuance significantly improves SPI, and green bond issuance improves SPI by increasing information transparency and improving sustainable performance. The cross-sectional test results show that higher independent director network centrality, a higher digitization level, and a higher ESG disclosure level strengthen the positive impact of green bond issuance on SPI. This paper supplements the literature on green bonds and SPI, and also provides empirical evidence that green finance can improve SPI.