The stock market reaction due to green bond issuance announcements on the European Market : An empirical investigation of abnormal rertuns when corporate green bond issuances are announced.

Sammanfattning

This study examines how the stock market reacts when a publicly-listed company announces a corporate green bond issuance in the European market. We examine 155 corporate green bond issuance announcements from 2017 to 2021 made by companies listed on the European stock exchange. Our findings can not confirm a stock market reaction to the announcement of a corporate green bond. The result shows no significant positive stock market reaction when a company announces a corporate green bond issuance for the first time. This finding suggests that the signaling argument is not necessarily applicable, as it suggests that companies signal their environmental commitment to the investors by announcing a corporate green bond issuance. Our findings do neither show a stronger stock market reaction due to a company having a low environmental performance at the time of announcement. This means that companies that actively try to transition into climate-friendly financing are not rewarded by the stock market.