Stock market reaction to green bond issuances: an empirical study on firms listed on Asian stock exchanges

Abstract

Among institutional, wealth, and retail investors, Environmental, Social, and Governance (ESG) investments are growing significantly. One example of ESG investments are green bonds. Green bonds can be defined as fixed income securities that finance investments with environmental or climate-related benefits. In recent years, the demand for green bonds has grown rapidly. The green bond issuances occurred across all continents, with a growing number of emerging market issuances. This substantial growth of the market and its increased importance in terms of decarbonisation, combined with the limited existing research on green bonds, makes it an appealing subject for an event study. Furthermore, studies on the Asian market exclusively is limited. With the Asian market being the fastgrowth market for green bonds, it would be interesting to analyse how the market reacts to such issuances. For this reason, this thesis wants to analyse stock market reaction to green bond issuances by an empirical study on firms listed on Asian stock exchanges for the year 2014-2019.