Reduced Profitability of Green Bond Issuance
Year: 2026
Type: article
Abstract: This paper uses a multi-time period difference-in-differences model to evaluate the effect of green bond issuance on the profitability of heavy-polluting enterprises listed on China's A-share market. Results reveal that the average treatment effect of green bond issuance on heavy-polluting firms’ ROE is significantly negative. Therefore, it suggests that green bond issuance requires issuing firms to give up a large amount of their profitability to develop green project and achieve green transformation. Heterogeneity analyses demonstrate that such issuance has a negative effect on firms’ profitability, which varies across different ownership, regions, and industries. Overall, these results are consistent with the concept that green bond issuance binds heavy-polluting companies to be more mindful of their polluting activities.
Source: IMF Working Paper
Language: English
Subfield: Finance
Domain: Social Sciences
SDG: Climate action
Open Access status: diamond
OpenAlex ID: W7153085164
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