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The value of external reviews in the secondary green bond market

Simeth, Nagihan LU (2022) In Finance Research Letters 46.
Abstract

In the green bond market, bond issuers can obtain various types of external reviews to validate their green claims. This paper examines the impact of external reviews in the form of verification, second party opinion (SPO), and green bond rating on the yield spread between a green bond and a paired conventional bond in the secondary green bond market. We perform coarsened exact matching, followed by regression analysis. The results of our analysis show that external reviews are effective signaling tools for issuers in the financial industry, and an SPO most effectively signals the credibility and quality of greenness information.

Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Bond yield, External review, Green bond, Information asymmetry
in
Finance Research Letters
volume
46
article number
102306
publisher
Elsevier
external identifiers
  • scopus:85110601684
ISSN
1544-6123
DOI
10.1016/j.frl.2021.102306
language
English
LU publication?
yes
id
b2432c0f-49a3-465b-a65a-7ed474c360a4
date added to LUP
2021-09-06 08:33:57
date last changed
2022-10-31 14:59:18
@article{b2432c0f-49a3-465b-a65a-7ed474c360a4,
  abstract     = {{<p>In the green bond market, bond issuers can obtain various types of external reviews to validate their green claims. This paper examines the impact of external reviews in the form of verification, second party opinion (SPO), and green bond rating on the yield spread between a green bond and a paired conventional bond in the secondary green bond market. We perform coarsened exact matching, followed by regression analysis. The results of our analysis show that external reviews are effective signaling tools for issuers in the financial industry, and an SPO most effectively signals the credibility and quality of greenness information.</p>}},
  author       = {{Simeth, Nagihan}},
  issn         = {{1544-6123}},
  keywords     = {{Bond yield; External review; Green bond; Information asymmetry}},
  language     = {{eng}},
  publisher    = {{Elsevier}},
  series       = {{Finance Research Letters}},
  title        = {{The value of external reviews in the secondary green bond market}},
  url          = {{http://dx.doi.org/10.1016/j.frl.2021.102306}},
  doi          = {{10.1016/j.frl.2021.102306}},
  volume       = {{46}},
  year         = {{2022}},
}