The Perspective of the Green Bonds as Novel Debt Instruments in Sustainable Economy
Being relatively new, even definition of green bonds is under scrutiny. As the market of green bonds is rapidly growing (with the small recent setback in growing rates), it is crucial to establish the main determinants of the green bonds market growth and evaluate the perspectives of green bonds in sustainable economy. The main objectives of the research are the following: to evaluate the need for the green bonds as instruments, fostering the sustainability of economy; to identify the determinants of both green bonds related and green investment; to analyze the green bond yields and prices in comparison to non-green bonds; to estimate the perspective volatility of the green bonds price. Green bonds characteristics were compared against characteristics of the non-green bonds. Covariation and regression based analysis was used for the identification of green investment determinants. Variance was estimated in the assessment of bond price volatility. The results showed that price of both green bonds and non-green bonds has tendency to fluctuate in the similar trend; green bond appeal determinants are in coherence with the determinants of green investment; green bonds tend to be less volatile than non-green bonds. It is concluded that the use of green bonds has significant potential to add to the sustainability of the economy.
KeywordsGreen bonds Green bond yield Green investment Financial instruments Green debt securities Debt instruments
This research was funded by a grant (No. TAP LU-4-2016) from the Research Council of Lithuania.
- Barclays. (2017). Barclays green chips TR USD index [online]. Retrieved from https://indices.barclays/IM/12/en/indices/details.app;ticker=BXIICNTU;tab=performance
- Climate Bonds Initiative. (2017). Explosive growth in green bonds market [online]. Retrieved from https://www.climatebonds.net/market/history
- S&P Dow Jones Indices. (2017). Green bond index [online]. Retrieved from http://us.spindices.com/indices/fixed-income/sp-green-bond-index
- Yue, S., Yang, Y., & Hu, Y. (2016). Does foreign direct investment affect green growth? Evidence from China’s experience. Sustainability, 8(158), 2–14.Google Scholar