Do Issuers Benefit from Green Bonds Issuance: Cross-Region Analysis

Abstract

Climate change represents one of the biggest collective problems faced by society, which necessitates a shift towards smart, low-carbon economies within the next 20 years. As a financial instrument aiding green development, proceeds raised from green bonds are used to finance climate- and environment-friendly projects. However, whether issuers actually benefit from this instrument remains debatable. This study applies the event study methodology and the difference-in-differences model to explore the stock market reaction to green bond issuance and its effect on firms’ profitability. Our analysis was based on a global sample of corporate green bonds issued between 2013 and 2022. The empirical results highlight a negative stock market reaction around the announcement of green bond issuance. Additionally, post-issuance, green bond issuers record better profitability than their non-green counterparts. Overall, although green bond issuances signal unfavourable information about issuing firms, issuers still record better profitability than their non-green counterparts.

Keywords: green bonds, financial performance, event study, sustainability

DOI: 10.7176/RJFA/16-9-02

Publication date: November 30^th 2025