The Influencing Factors Leading To The Undervaluation Of China Green Bond Price

With the advancement of ecological civilization construction,green finance has gradually entered our lives.As an important part of green finance,the green bond market has developed rapidly in China since 2016.With the rapid expansion of Chinese green bond market,there are also some policy and market mechanism issues that need to be resolved.Among them,the pricing of green bonds has an important impact on whether green bonds can develop faster and better.This paper conducts an in-depth study on the issue that the Chinese green bond price is undervalued.Through the exploration of the fundamental information of Chinese green bond market,it is found that Chinese green bond market is characterized by multi-state enterprises,long-term maturity,and high rating.The price is required to have a higher yield to maturity,which is contrary to Chinese policy goal of implementing preferential policies for green bonds and reducing the cost of green bond issuance.Therefore,this paper explores the reasons for this problem.Summarizing the characteristics of Chinese green bond market and the views of previous scholars,this paper believes that there are two reasons for this situation,one is the existence of "greenwashing risks",and the other is the lack of liquidity in Chinese green bond market.Taking Chinese green bonds from 2016 to 2021 as a sample,compared with non-green bonds,this paper studies the liquidity of the green bond market has a significant impact on the price of green bonds.Investors believe that green bonds without green certification have higher "greenwashing risks",so they require more risk compensation.Further,the study found that the impact of this mechanism on credit spreads is reflected in AA-rated green bonds The most obvious reason is that some bond issuers with poor qualifications want to take advantage of the green channel to avoid their own monitoring risks.To further verify this point of view,this paper conducts a Probit regression on whether to carry out green certification through the financial characteristics of bond issuers,and finds that green bond issuers who choose not to carry out green certification have higher worse financial performance.Based on the above research results,this paper puts forward corresponding policy suggestions for the undervaluation of green bonds.