The Effect Of Top Team Characteristics On Green Bond Credit Spreads

Green bonds play an important role in China’s green financial system,and their relevant preferential policies have created very convenient investment channels for companies’ energy-saving and emission reduction,circular economy and other green projects.The issuance of green bonds reflects the importance enterprises attach to green economy and green innovation,and promotes the healthy development of China’s low-carbon economy and green finance,which offers a powerful support for enterprises to establish a good image.Although China’s green bond market started late,it has developed rapidly and is now the largest market in the world.The rapid development has caused many problems in the institutional system and supervision and management,and the degree of information asymmetry between issuers and investors has further increased,which undoubtedly increases the credit risk of green bonds.When investors buy green bonds,they also demand higher risk premiums due to the higher credit risk they take,which further widens the credit spreads.In order to reduce the information asymmetry intensified between issuers and investors,companies started to look for the non-institutionalized form of executive team characteristics to solve their dilemma.The members of the executive team will develop unique values and cognitive systems due to the different background characteristics they experience,and these exclusive background characteristics will inevitably have some influence on the behavioral decisions of the executives.The executive team is responsible for the "rise and fall" of the company,and therefore controls the important decisions of the company,so can their background characteristics decrease the risk of the company by influencing their judgment on financing decisions,thus reducing the risk premium? Using this as an entry point,this thesis examines the relationship between the characteristics of the executive team and the credit spreads of green bonds.This thesis is mainly divided into the following seven chapters.Chapter 1 is the introduction,from the background of the development of China’s green bond market and the important position of executive team in enterprises,the importance of studying the characteristics of executive team and green bond credit spreads is explained;the innovation of the research is to explore the influence of the personal characteristics and background characteristics of executive team on green bond credit spreads respectively,which makes up the blank of the research.Chapter 2 is a literature review,which first defines the concepts related to executive team,executive team characteristics,green bonds and green bond credit spreads,and divides the executive team characteristics into personal characteristics and background characteristics,with personal characteristics including executive gender and education,and background characteristics including financial background,overseas background and academic background.Then,the relevant studies on the relationship between personal characteristics of executive team,background characteristics and green bond credit spreads are systematically sorted out.Chapter 3 presents the status analysis,in terms of green bonds,dissecting the issuance scale and policy enactment in China since the issuance of green bonds in 2016;in terms of credit spreads,the status analysis is conducted in terms of transaction scale,issuance duration,green bond rating and issuing entity rating;in terms of executive team characteristics,the status analysis is conducted in terms of age,gender and the proportion of executives from various occupational backgrounds.Chapter 4 analyzes the green bond credit spreads and executive team characteristics from a theoretical perspective based on relevant models and theories.Chapter 5 elaborates the influence mechanism and gives the research hypothesis with related theories,and adds the mediating variable of issuer rating to further investigate its effect on the relationship between executive team characteristics and green bond credit spreads.Chapter 6 is based on the number of green bonds issued from 2016-2021,and 520 green bonds are identified after screening as the research data of this thesis,and the heterogeneity analysis of the nature of property rights and the mediating effect analysis of the rating of the issuing entity are conducted.The empirical results show that(1)among the personal characteristics of executives,the gender of executives has no significant effect on the credit spread of green bonds;however,when the proportion of executives with high education in the executive team increases,it effectively narrows the credit spread of green bonds.Among executive background characteristics,as the number of executives with financial and academic backgrounds increases,it will reduce the credit spread of green bonds;however,when the number of executives with overseas backgrounds increases,it will widen the credit spread of green bonds.(2)In the analysis of equity heterogeneity,for individual characteristics,increasing the number of female executives in non-SOEs can narrow the credit spreads of green bonds,while increasing the number of executives with high education can reduce the credit spreads of green bonds in both SOEs and non-SOEs.With respect to the background characteristics,the credit spreads of green bonds are narrowed by increasing the number of executives with financial and academic backgrounds in SOEs;the credit spreads of green bonds are widened by increasing the number of executives with overseas backgrounds in both SOEs and non-SOEs.(3)When the number of executives with high education,financial background and academic background in the executive team increases,they can narrow the credit spread of green bonds by improving the credit rating of the issuing entity;the overseas background of executives also has a certain effect on the rating of the issuing entity,but the effect is not obvious;and the gender of executives does not affect the credit spread of green bonds by affecting the rating of the issuing entity.Chapter 7 is based on the previous study and proposes relevant policy recommendations from both government and corporate aspects.