On the Corporate Use of Green Bonds
Journal of Economics and Management Strategy, Forthcoming
Posted: 17 Oct 2019
Date Written: September 25, 2019
When do wholesalers issue green bonds to finance their socially responsible activities instead of charging a premium for the products they produce? We show that in less competitive retail markets when retailers can "skim" more of the premium that end consumers pay for socially responsible products, green bonds provide additional funds to help cover the cost of a wholesaler's socially responsible activities. Similar incentives arise if the wholesaler's input is a small component of the end consumers' product, or if it is difficult for end consumers to identify the wholesaler's socially responsible activities.
Keywords: Green Bonds, Corporate Social Responsibility, Intermediate Good Producer, Retail Competition
JEL Classification: D21, G30, M14, Q50
Suggested Citation: Suggested Citation