Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/286892 
Year of Publication: 
2021
Citation: 
[Journal:] Review of Managerial Science [ISSN:] 1863-6691 [Volume:] 16 [Issue:] 3 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2021 [Pages:] 797-834
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
We investigate the asset pricing implications of the greenness of bonds. To estimate a green-pricing effect, we determine the 'green bond premium' as the difference between the yields of matched conventional and green-labeled bonds. On a cross-sectional average, green bonds experience a statistically significant positive premium. This premium increases with external greenness evaluations, i.e., investors accept premiums of up to 5 basis points for bonds with a substantial environmental agenda. This external validation effect, which is strongest for bonds that are rated dark-green, may offset not incurring information costs, as this effect decreases with increasing age of bonds.
Subjects: 
Green bond premium
External review
Second-party opinion
Shade of green
Climate finance
Impact investing
JEL: 
B76
B16
P20
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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