Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265521 
Year of Publication: 
2022
Series/Report no.: 
DIW Discussion Papers No. 2019
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
This paper explores the effect of a firm's reputation of being a green bond issuer on its financing costs. Using a sample of 73 listed Swedish real estate companies issuing in total about 1500 bonds over the period from 2011 till 2021, differencein- difference analyses and instrumental variable estimations are applied to identify the causal impact of frequent green vis-à-vis frequent non-green bond issuing on a firm's cost of capital and credit rating. The paper argues that it is repetitive issuance which lowers a firm's cost of capital, while the effects from first or one-time green bond issuance is the opposite. In line with the reputation capital hypothesis, issuing green bonds even lowers the firm's cost of equity capital, while issuing non-green bonds has no effect on the cost of equity capital.
Subjects: 
bond issuance
green debt
reputation capital
sustainability
ESG
JEL: 
G32
R30
R32
Document Type: 
Working Paper

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