The grass is greener on the other side: Comparison of green versus brown corporate bonds

AYAYDIN HACIÖMEROĞLU H., DANIŞOĞLU S., GÜNER Z. N.

Borsa Istanbul Review, cilt.22, sa.6, ss.1182-1194, 2022 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 22 Sayı: 6
  • Basım Tarihi: 2022
  • Doi Numarası: 10.1016/j.bir.2022.08.006
  • Dergi Adı: Borsa Istanbul Review
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, EconLit, Directory of Open Access Journals
  • Sayfa Sayıları: ss.1182-1194
  • Anahtar Kelimeler: Blended-value investing, Green bonds, Greenium, Impact investing
  • Orta Doğu Teknik Üniversitesi Adresli: Evet

Özet

This study compares the yield-to-maturities on green versus brown corporate bonds on their issue dates, after controlling for the market, firm, bond, and currency characteristics of the bonds. Our analyses show that if these characteristics are not addressed, it is possible to find support for the existence of a “greenium” at a magnitude of about 25 basis points. However, when all yield factors are included in the models, the results change and indicate that issuers do not necessarily enjoy any cost advantage when they issue green bonds, instead of brown bonds. Failure to consider these interactions might lead to biased findings.