The Demand for Green Bonds

52 Pages Posted: 22 Apr 2023

See all articles by Hari Gopal Risal

Hari Gopal Risal

University of Strathclyde; Kathmandu University

Chandra Thapa

University of Strathclyde

Andrew P. Marshall

University of Strathclyde - Strathclyde Business School

Biwesh Neupane

University of Birmingham

Arthur Krebbers

University of Strathclyde - Department of Accounting and Finance

Date Written: April 1, 2023

Abstract

Drawing on the frameworks of signaling and socially responsible investment (SRI) theoretical lens, we investigate the primary market demands for green bonds (GB). Using unique information on the orderbook size of bonds issued worldwide during 2013-2022, we find that the demand for corporate GB is about 32 to 42% points higher than comparable conventional non-GB issued by similar firms. Further, the demand for debut GB is stronger than seasoned GB offerings and higher for those issued by financial firms compared to non-financial firms. Finally, our results also show that the demand is higher for GB issued by firms with higher environmental commitments and issued in countries with better environmental performance.

Keywords: Green bonds; Investor demand; Orderbook; Primary Market; Signaling Theory; Socially Responsible Investments (SRI); Environmental, Social and Governance (ESG)

JEL Classification: G14, G18, G32, M14, Q56

Suggested Citation

Risal, Hari Gopal and Thapa, Chandra and Marshall, Andrew P. and Neupane, Biwesh and Krebbers, Arthur, The Demand for Green Bonds (April 1, 2023). Available at SSRN: https://ssrn.com/abstract=4419543 or http://dx.doi.org/10.2139/ssrn.4419543

Hari Gopal Risal (Contact Author)

University of Strathclyde ( email )

United Kingdom
07361822421 (Phone)

HOME PAGE: http://https://www.strath.ac.uk

Kathmandu University ( email )

+447443771664 (Phone)

Chandra Thapa

University of Strathclyde ( email )

16 Richmond Street
Glasgow 1XQ, Scotland G1 1XQ
United Kingdom

HOME PAGE: http://https://www.strath.ac.uk/staff/thapachandradr/

Andrew P. Marshall

University of Strathclyde - Strathclyde Business School ( email )

100 Cathedral Street
Glasgow G4 0LN
United Kingdom
44 0141 548 3894 (Phone)

Biwesh Neupane

University of Birmingham ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

Arthur Krebbers

University of Strathclyde - Department of Accounting and Finance

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