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Does compliance with Green Bond Principles bring any benefit to make G20’s ‘Green economy plan’ a reality?
Author(s) -
Nanayakkara Kariyawasam Galoluwage Madurika,
Colombage Sisira
Publication year - 2021
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12732
Subject(s) - bond , coupon , yield (engineering) , compliance (psychology) , government (linguistics) , government bond , business , economics , monetary economics , finance , psychology , social psychology , linguistics , philosophy , materials science , metallurgy
We examine the impact and degree of compliance with Green Bond Principles (GBPs) on investor demand for Green Bonds (GBs) in G20 countries by employing cross‐sectional regression to analyse data over the period 2007–2016. After controlling for common bond‐specific and macroeconomic variables, we find a significant positive impact of higher compliance with principles on investor demand, as measured by bid‐ask spread and yield spread. We show that GBs issued by government institutions are able to minimise the adverse effects of low compliance with GBPs and the investor demand for fixed‐coupon GBs is higher than float‐coupon GBs.