Abstract:

Green financial policies are of great significance in achieving green and low-carbon transformation of the economy, and in leveraging the macro and micro regulatory functions of the financial market. Based on the circulation price data of companies’credit bonds in 2015-2019, this paper has used the staggered DID method to study whether the first issuance of corporate green bonds in respective industry has effects on the credit spreads of bonds issued by peer firms in the secondary market. The research results indicate: the credit spreads of peer firms’bonds in the secondary market decrease after these first issuances of corporate green bonds, which strongly prove the positive industry spillover effect. Further, we find that higher institutional holding ratios of the bond, higher capital intensity of the firm, stricter regional environmental regulations, and higher economic policy uncertainty reinforce the reduction of the peer bonds’credit spreads. Through the impact mechanism test, it is found that these first issuances of corporate green bonds affect the credit spreads of peer firms’bonds by promoting the reduction of peer firm’s debt financing cost. At the same time, we find that these first issuances of corporate green bonds lead their peer firms to issue green bonds, but the following green bonds issued by peer firms didn’t obviously affect the credit spreads of their issuers’bonds. Finally, this paper had used the event study method to calculate abnormal returns of bonds to measure the market responses to the first issuances of corporate green bonds. The result of this further research is that peer firms’bonds can gain cumulative abnormal return in the 15-day event window period. This paper examines the positive spillover effect from each first issuance of corporate green bonds in their industries to their peer bonds’ credit spreads from the perspective of the secondary market. The conclusion of this paper has reference significance for promoting the development of the real economy, optimizing the allocation of financial resources

and promoting the high-quality development of the bond market.

Key words: credit spreads, green bond, spillover effect, debt financing cost