Abstract
This paper summarizes the relevant researches in the area of the green bond market within the perspective of the performance of the global green bond market in the face of the COVID-19 pandemic. Despite the rapid expansion of the green bond market during the last decade, this market has also experienced the consequences of the COVID-19 pandemic. The researches on the effect of COVID-19 and its induced crisis on the green bond markets are still fragmentary; therefore, the main purpose of this research is to evaluate the impact of the COVID-19 pandemic on the global green bond market. To reach the purpose, the methods of literature analysis, and correlation-regression analysis are used. In the first section of the paper, the research problem is presented; in the second part the analysis of academic literature is conducted; in the third part the design of the research is described, and in the fourth part the results of the assessment of the impact of COVID-19 pandemic on the global green bond market are discussed. The results of the research revealed that the spread of the COVID-19 pandemic appeared to have a negative impact on the performance of the S&P Green Bond Index. The market reaction to deaths caused by COVID-19 infection proved to be stronger than the reaction to confirmed cases of COVID-19 infection. However, after a sufficiently significant negative shift, which was observed in the first quarter of 2020, the S&P Green Bond Index regained its upward trend, which continued for the rest of the year.
Highlights
Since the first issuance in the year 2007, the green bond market has attracted great interest from the market participants and has demonstrated a rapid expansion: from annual issuance of 30 billion U.S dollars in the year 2013 (Tukhanen & Vulturius, 2020) to a new annual record of 270 billion U.S dollars in the year 2020 (Sustainable Bond Insight, 2021)
Whereas there are little researches on the effect of COVID-19 and its induced crisis on the green bond markets, the main purpose of this paper is to evaluate the impact of the COVID-19 pandemic on the global green bond market
Seeking to achieve the main purpose, after the analysis of relevant academic literature, we use the method of correlation-regression analysis in order to quantitatively assess the effect that COVID-19 had made on the global green bond market
Summary
Since the first issuance in the year 2007, the green bond market has attracted great interest from the market participants and has demonstrated a rapid expansion: from annual issuance of 30 billion U.S dollars in the year 2013 (Tukhanen & Vulturius, 2020) to a new annual record of 270 billion U.S dollars in the year 2020 (Sustainable Bond Insight, 2021). Despite the demonstrated tremendous growth, the green bond market still remains small in comparison with the fixedincome market (Liaw, 2020). Despite the outstanding success of the green bond market during the last decade, this market has inevitably confronted with the consequences of the COVID-19 infection and pandemic-induced downturn. Whereas there are little researches on the effect of COVID-19 and its induced crisis on the green bond markets, the main purpose of this paper is to evaluate the impact of the COVID-19 pandemic on the global green bond market. Seeking to achieve the main purpose, after the analysis of relevant academic literature, we use the method of correlation-regression analysis in order to quantitatively assess the effect that COVID-19 had made on the global green bond market. As a dependent variable the S&P Green Bond Index was selected, and as independent variables the COVID-19 related measures were used
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