A master thesis from Aalborg University
Stock Market Reaction to Green Bond Issuances: An event study on non-financial companies in the Nordic region
[Stock Market Reaction to Green Bond Issuances]
Author(s)
Term
4. semester
Publication year
2024
Submitted on
2024-06-03
Abstract
With the growing importance of environmentally sustainable practices, green bonds have emerged as an important financial tool for financing environmentally friendly projects. The existing literature is divided between positive, negative and neutral impact green bond issuances have on the stock performance. In this thesis I investigate whether green bond issuances have an impact on stock performance in non-financial companies within the Nordic region, utilizing event study methodology within multiple event windows on 193 green and 198 conventional bonds issued between 2014-2024. Overall, results suggest that there is a varied impact on stock performance, where results for green bond issuances generally reveal positive CARs post-issuance, especially in longer event windows, while for conventional bond issuances CARs exhibit more variability primarily observed in pre-issuance period. Additionally, I explore whether the issuance of green bonds leads to significant changes in stock performance compared to conventional bonds. The analysis does not conclusively show significant differences, as I observe mixed results. This highlights the complexity and context dependence of market reactions to green bond issuances.
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