Author Abstract
We study green bonds, which are bonds whose proceeds are used for environmentally sensitive purposes. After an overview of the US corporate and municipal green bonds markets, we study pricing and ownership patterns usingx a simple framework that incorporates assets with nonpecuniary utility. As predicted, we find that green municipal bonds are issued at a premium to otherwise similar ordinary bonds. We also confirm that green bonds, particularly small or essentially riskless ones, are more closely held than ordinary bonds. These pricing and ownership effects are strongest for bonds that are externally certified as green.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: October 2018
- HBS Working Paper Number: NBER Working Paper Series, No. 25194
- Faculty Unit(s): Finance; Accounting and Management