Financing for sustainability: Empirical analysis of green bond premium and issuer heterogeneity

More recently, investors’ preference for green bonds is of particular interest researchers. The possible non-pecuniary motive in sustainable finance can be identified by the bond premium. But no consensus has been achieved owing to differences samples and market settings. This paper specifically focuses on estimation premium China. We introduced three issuance motivation theories explain drivers convinced them through a set empirical tests. propensity score matching method was employed claim that compared with matched conventional bonds, are priced at an average negative 7.8bps, implying projects may issued lower cost. Considering financial group higher than corporate group, financing development still led indirect finance. Furthermore, results convince pronounced state-owned enterprises varies across groups. Central SOEs have more advantage raising funds local SOEs. In addition, effect ownership will significantly change if issues third-party verification. role verification important reducing information asymmetry avoiding greenwashing behavior. suggest resources need properly allocated real or government supportive measures.