Simon C. Stölzle – University of Applied Sciences Kufstein, Finance, Accounting & Auditing through the “Crowdfunding Monitor” project and a bond trader at MGW Geld- und Wertpapiervermittlung, Raiffeisenallee 16, 82041 Oberhaching, Germany
Dominika P. Gałkiewicz – University of Applied Sciences Kufstein Tirol, Finance, Accounting & Auditing, Andreas Hofer-Str. 7, 6330 Kufstein, Austria
DOI: https://doi.org/10.31410/LIMEN.S.P.2020.27
6th International Scientific-Business Conference – LIMEN 2020 – Leadership, Innovation, Management and Economics: Integrated Politics of Research – SELECTED PAPERS, Online/virtual, November 26, 2020, published by the Association of Economists and Managers of the Balkans, Belgrade; Printed by: SKRIPTA International, Belgrade, ISBN 978-86-80194-40-0, ISSN 2683-6149, DOI: https://doi.org/10.31410/LIMEN.S.P.2020
Abstract
This study examines whether there is a negative green bond premium for investors in the secondary European market. To answer this question, the matched pairs method is applied, where the daily i-spreads of green bonds and the interpolated daily i-spreads of similar non-green bonds are compared. The bond sample contains 37 bond couples issued by corporations, financial institutions and governments between November 2019 and April 2020. The findings suggest that there is an average statistically significant negative very small green bond premium. The negative premium could be explained by investors’ preferences for green financial instruments leading to excess demand. The negative green bond premium may also be a compensation for the issuer’s external costs or reflect the internalization of environmental externalities. Further evidence shows that the negative green bond premium varies across industries and is not higher for lower rated investment grade bonds.
Keywords
Green, Bond, Green finance, Premium, Europe.
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