Is there an association between firm's green bond issuance and their financial performance?

Abstract

This thesis explores the relationship between green bond issuance and financial and environmental performance. The study utilizes a panel dataset consisting of 832 conventional bonds and 81 green bonds that were issued during the period 2016 to 2021. For the purpose of gaining an overview of the financial analysis of capital structure and how green bond affects profitability and firm’s performance, we have explored the relationship between green bonds issuance and profitability in American firms. A fixed effects model is used to examine the relationship between green bond issuance and both financial and environmental performance. The aim is to determine if there is a positive association between these factors. The main finding of our thesis is that green bond issuance is not positively associated with financial performance. However, the results indicate that green bond issuance is positively associated with environmental performance, which is consistent with our hypothesis.