Research On The Green Premium Of China’s Bond Market

In recent years,China’s economic development is trying to get rid of the old road of "development first,governance later",especially under the guidance of "carbon neutral,carbon peak" goal proposed by General Secretary Xi,China is firmly transforming to green development.On the one hand,green development requires a higher cost than using traditional ways;on the other hand,it requires huge capital investment,and green financial instruments such as green bonds play a crucial role in green investment.2015 was the initial year of China’s green bond market,but its development is very rapid,and it is expected to blow up in 2021.It has become one of the main green financing tools for enterprises in 2021,which can bring them many conveniences such as relaxing the issuance conditions,but at the same time,it also faces problems such as the lack of investor recognition.This paper focuses on the "green premium" in China’s bond market and selects green bonds issued from 2016 to July 2022 and their matching general bonds as the research sample to investigate whether green bonds have the advantage of financing cost compared with general bonds.The results show that there is a significant negative green premium in China’s bond issuance market,and the credit spread of green bonds is on average 26.52 BP lower than that of ordinary bonds,and the mechanism test results show that improving the information disclosure level of issuers and helping issuers to obtain a good green reputation are two important channels for green bonds to obtain a green premium.In addition,this paper also explores the differences in the performance of green premiums in different samples,and the results show that green bonds issued by state-owned enterprises have higher green premiums than those issued by non-stateowned enterprises;public green bonds have higher green premiums than private green bonds;low-rated green bonds have higher green premiums than high-rated green bonds;green bonds issued by entities in less economically developed regions have higher green premiums than those issued by entities in economically developed regions.Combining the findings of theoretical and empirical analyses,this paper puts forward policy suggestions such as strengthening the information disclosure system of green bonds,enhancing the promotion of green investment,improving the financing difficulties of private enterprises,and promoting the construction of green exchange.