CORPORATE GREEN BONDS: AN EVENT STUDY OF STOCK RETURN REACTION TO GREEN BOND ISSUANCE IN THE UNITED STATES

Abstract

This paper is a standard market model event study measuring the effect of corporate green bond issuance on the issuer’s stock returns in the days after the issue announcement. My study evaluates 40 companies spanning nine industries, all of which announced issuance in the period between 2013 and 2023. I find that, contrary to much of the existing literature, after an initial public company announcement that it will issue these securities, there is not a statistically significant abnormal rate of return increase over the following days. Remarkably, companies in the financials industry tend to have more strongly positive cumulative abnormal stock returns (CARs) post-event than any other industry. This has interesting implications for the issuance factors that future research may need to consider when evaluating firms by economic sector.