The Green Incentives and Green Bonds Financing under the Belt and Road Initiative

ABSTRACT

Since the proposal of the “Belt and Road” initiative, the concept of green development has been running through it. As an important part of green financial instruments, green bonds have become increasingly popular in recent years. This study takes the issuance of green bonds in China as the research object and examines the response of bond and stock market to the issuance of a green bond. The empirical results show that there are green incentives in the Chinese capital market. We also studied the economic impact of the Belt and Road Initiative on the issuance of green bonds. The results show that the Belt and Road Initiative reduces the cost of bond issuance. Our findings help to analyze the literature on the impact of ESG behavior on company performance and company value. Finally, the study made policy recommendations to improve the effectiveness of China’s green bonds and provide sustainable financial support for the “Belt and Road” initiative.

KEYWORDS:

• Green bond
• Belt and Road
• Event analysis method
• Market value