Investing the factors affecting green bond investments in China: Cases for Beijing and Shenzhen

Zenno, Yoshihiro and Aruga, Kentaka (2023): Investing the factors affecting green bond investments in China: Cases for Beijing and Shenzhen.

Abstract

We conducted a survey on institutional investors in Beijing and Shenzhen to analyze the factors affecting green bond (GB) investing in China, such as credit rating, GB issuer, fund use, liquidity, redemption term, certification label, and type of currency. We then compared the results for Beijing and Shenzhen, including factors that affected greenium and the two cities’ willingness to pay (WTP). Using a double-bounded dichotomous choice contingent valuation method, we find that higher credit ratings tend to increase Beijing investors’ WTP and that the use of GB proceeds affects Shenzhen investors’ WTP. We also find that investors place importance on the type of currency, length of redemption term, and liquidity when investing in GB, while the certification label does not have an impact on WTP. The WTP for GB was higher among Shenzhen investors than among Beijing investors. The government, financial regulators, and issuers looking to enhance the design of GBs and grow their market share in China would all benefit from the study's findings.

• Item Type: MPRA Paper
• Language: English
• Keywords: green bonds, greenium, willingness to pay, credit rating, China, Renminbi
• Subjects: D - Microeconomics > D0 - General; F - International Economics > F6 - Economic Impacts of Globalization > F64 - Environment; G - Financial Economics > G1 - General Financial Markets

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