Research on the impact of green bond issuance on the stock price of listed companies

Abstract

PurposeConsidering that listed companies are the main body of natural resource consumption and pollutant emission, this study aims to explore the stock price effect and source channels of green bond issuance of listed companies. This is extremely necessary to promote listed companies to actively fulfill their environmental responsibilities so as to achieve sustainable economic and social development.Design/methodology/approachIn this paper, the companies that issued green bonds in Shanghai and Shenzhen stock markets in China from 2016 to 2018 are used as samples. First of all, the authors adopt the event study method and match the two models to prove that there is a stock price effect in green bond issuance. Then, the authors introduce the general regression model to analyze the sources of the stock price effect of green bond issuance in detail through three channels: “financing cost,” “investor attention” and “fundamental.”FindingsIn the above three channels, the “investor attention” channel can well explain the stock price effect of green bond issuance. Meanwhile, the authors also find that the stock price effect of the subsequent issuance of green bonds is more significant than that of the first time, non-financial companies are more pronounced than financial companies, public issuance are more obvious than private issuance, state-owned companies are more notable than non-state-owned companies, small-scale companies are more evident than large-scale companies and companies with high equity concentration are clearer than those with low equity concentration.Originality/valueTaking China as the research object for the first time, this paper comprehensively employs the capital asset pricing model and Fama–French five-factor model to discuss the stock price effect of green bond issuance of listed companies. Secondly, this paper also studies whether the way of green bond issuance, the type and size of the company, as well as the degree of ownership concentration will have different effects on the stock prices of listed companies. The research results provide new ideas and methods for the stock price effect of green bond issuance.