Essays on green bonds

Jin, Shijie 2025. Essays on green bonds. PhD Thesis, Cardiff University. Item availability restricted.

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Abstract

This thesis examines the heterogeneous nature of green bonds in the European Union (EU) financial market, with a particular focus on how the credibility of environmental labelling shapes their financial and risk-related properties. While green bonds are often treated as a homogeneous asset class, this research demonstrates that substantial differences exist depending on whether bonds are self-labelled or externally certified. The thesis consists of three interconnected studies. First, a systematic literature review of 206 peer-reviewed articles identifies three main research areas: asset pricing, corporate finance, and environmental impact. The review documents a clear shift in the literature from a focus on financial characteristics toward increasing attention to environmental credibility and sustainability outcomes. Second, the thesis investigates how different labelling approaches affect bond pricing and investor attention. Using an endogenous treatment effect model and a hand-collected dataset of EU green bonds, the results show that externally labelled bonds exhibit significantly lower yields and attract greater investor attention compared to self-labelled bonds. This suggests that credible certification enhances both signalling effects and investor preferences for sustainability. Third, the thesis explores the role of green bonds as hedging instruments during periods of extreme market stress, such as the COVID-19 pandemic and the Russia–Ukraine war. The findings reveal that only externally labelled green bonds provide meaningful hedging benefits under tail-risk scenarios, while self-labelled bonds behave similarly to conventional assets. Overall, the thesis highlights the critical importance of label credibility in shaping the economic value of green bonds. By moving beyond a binary classification of green versus non-green assets, it provides new insights into how credibility influences pricing, investor behaviour, and risk management in sustainable finance markets.

Item Type:	Thesis (PhD)
Date Type:	Completion
Status:	Unpublished
Schools:	Schools > Business (Including Economics)
Date of First Compliant Deposit:	20 March 2026
Last Modified:	25 Mar 2026 15:47
URI:	https://orca.cardiff.ac.uk/id/eprint/185897

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