| dc.description.abstract | Mobilizing public and private capital towards environmentally friendly projects is crucial
to reaching the goals set by the Paris Agreement. Green bonds are one type of financial
security that seeks to attract investment in sustainable companies and projects. Hence,
green bonds can be an essential tool in financing the transition.
By comparing yields between green and conventional bonds in the Nordic secondary market,
we investigate whether investors forgo yield when investing in green bonds. We use a
matching method to compare green and conventional bonds with similar characteristics.
This resulted in 119 matched triplets for analysis. We use a two-step regression to
investigate the green bond premium in the Nordic secondary market. First, we perform a
fixed effect regression on the matched triplets to estimate the green bond premium. Our
sample is also divided into sub-samples to investigate if the green bond premium varies
between categories. We use the estimated green bond premium for the full sample as a
dependent variable in the second regression, to find possible determinants of the green
bond premium.
Our findings reveal a significant positive green bond premium of 10 basis points. We find
that the highest green bond premium appears for NOK-nominated bonds and bonds with
an issue amount below SEK 250 million. Additionally, some bond characteristics seem to
affect the size of the green bond premium significantly. | en_US |
