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Session Chair: Hong Zhang, Singapore Management University Discussant: Dasol Kim, Office of Financial Research
Location:9B301 (3rd basement floor, International Hall)
Presentations
Corporate Green Bonds: Market Response and Corporate Response
Sanjai Bhagat1, Aaron Yoon2
1University of Colorado Boulder, United States of America; 2Northwestern University, United States of America
We analyze the stock market response to a comprehensive international sample of 1,560 corporate green bond announcements between January 2013 and January 2022. We do not find any significant market response to these green bond announcements. We conduct a battery of tests to check the robustness of this result, including a focus on the power of event study methodology as it relates to event window length. Also, we find that in the year of the green bond announcements, the abnormal operating performance of these announcing firms is significantly negative, which is consistent with the argument that managers of these firms are using the green bond announcements as a cover for their poor business performance.
