Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond market
Abstract Policymakers and managers have increasingly adopted green bonds as a direct financing tool to address environmental degradation and climate change in emerging economies; however, the increasing green washing sentiments in the green bond market raise questions on whether green bonds can nudg...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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SpringerOpen
2024-03-01
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| Series: | Financial Innovation |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s40854-024-00620-8 |
| _version_ | 1827326471730888704 |
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| author | Ying Liu Hongyun Huang William Mbanyele Fengrong Wang Huiling Liu |
| author_facet | Ying Liu Hongyun Huang William Mbanyele Fengrong Wang Huiling Liu |
| author_sort | Ying Liu |
| collection | DOAJ |
| description | Abstract Policymakers and managers have increasingly adopted green bonds as a direct financing tool to address environmental degradation and climate change in emerging economies; however, the increasing green washing sentiments in the green bond market raise questions on whether green bonds can nudge polluting businesses to achieve green transformation. Therefore, this study joins the controversial debate by investigating the impact of green bond issuance on corporate environmental responsibilities and the potential impact mechanisms and economic consequences. Using the data of Chinese listed enterprises from 2011 to 2020 and the staggered issuance of green bonds as plausibly exogenous shocks, we determine that the enterprises in the experimental group that issued green bonds increased their environmental performance compared to their counterparts. Furthermore, this positive link is maintains after a series of robustness tests. Moreover, we identify that green bond issuance plausibly enhances environmental responsibility engagements through two governance channels, namely, internal management and external supervision. This beneficial effect appears more pronounced for subsamples of firms in low-polluting industries, without environmental subsidies and with higher managerial abilities. Furthermore, economic consequences indicate that the issuance of green bonds primarily motivates speculative shareholder benefits, as evidenced by short-term increases in stock yields but with limited impact on the short-run financial performance. Overall, these findings offer new evidence supporting that green financing tools could play a helpful hand toward environmental sustainability. |
| first_indexed | 2024-03-07T14:46:05Z |
| format | Article |
| id | doaj.art-cc0da9222c22416b8bd0e2cb41ac0777 |
| institution | Directory Open Access Journal |
| issn | 2199-4730 |
| language | English |
| last_indexed | 2024-03-07T14:46:05Z |
| publishDate | 2024-03-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Financial Innovation |
| spelling | doaj.art-cc0da9222c22416b8bd0e2cb41ac07772024-03-05T20:01:47ZengSpringerOpenFinancial Innovation2199-47302024-03-0110114210.1186/s40854-024-00620-8Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond marketYing Liu0Hongyun Huang1William Mbanyele2Fengrong Wang3Huiling Liu4Center for Economic Research, Shandong University Qingdao Institute of Humanities and Social Sciences, Shandong UniversityCenter for Economic Research, Shandong UniversityCenter for Economic Research, Shandong UniversitySchool of Economics, Hefei University of TechnologyAbstract Policymakers and managers have increasingly adopted green bonds as a direct financing tool to address environmental degradation and climate change in emerging economies; however, the increasing green washing sentiments in the green bond market raise questions on whether green bonds can nudge polluting businesses to achieve green transformation. Therefore, this study joins the controversial debate by investigating the impact of green bond issuance on corporate environmental responsibilities and the potential impact mechanisms and economic consequences. Using the data of Chinese listed enterprises from 2011 to 2020 and the staggered issuance of green bonds as plausibly exogenous shocks, we determine that the enterprises in the experimental group that issued green bonds increased their environmental performance compared to their counterparts. Furthermore, this positive link is maintains after a series of robustness tests. Moreover, we identify that green bond issuance plausibly enhances environmental responsibility engagements through two governance channels, namely, internal management and external supervision. This beneficial effect appears more pronounced for subsamples of firms in low-polluting industries, without environmental subsidies and with higher managerial abilities. Furthermore, economic consequences indicate that the issuance of green bonds primarily motivates speculative shareholder benefits, as evidenced by short-term increases in stock yields but with limited impact on the short-run financial performance. Overall, these findings offer new evidence supporting that green financing tools could play a helpful hand toward environmental sustainability.https://doi.org/10.1186/s40854-024-00620-8Green bondsEnvironmental responsibilityInternal managementExternal supervisionStaggered difference-in-difference |
| spellingShingle | Ying Liu Hongyun Huang William Mbanyele Fengrong Wang Huiling Liu Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond market Financial Innovation Green bonds Environmental responsibility Internal management External supervision Staggered difference-in-difference |
| title | Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond market |
| title_full | Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond market |
| title_fullStr | Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond market |
| title_full_unstemmed | Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond market |
| title_short | Does the issuance of green bonds nudge environmental responsibility engagements? Evidence from the Chinese green bond market |
| title_sort | does the issuance of green bonds nudge environmental responsibility engagements evidence from the chinese green bond market |
| topic | Green bonds Environmental responsibility Internal management External supervision Staggered difference-in-difference |
| url | https://doi.org/10.1186/s40854-024-00620-8 |
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