16/05/2025 - 11:00 - LIDAM D.251 
> "Green Bonds and Competitive Markets: Exploring Incentives for Sustainable Financing". 

Syrine Ayachi (UNamur) 

will give a presentation on : 

Green Bonds and Competitive Markets: Exploring Incentives for Sustainable Financing. 

Abstract : 

This paper examines the impact of market competition on firms' decisions to issue green bonds, with emphasis on whether competition from firms with previous green bond issuances influences such a decision. Using a Cragg model on a sample of green bond issuers from the MSCI World Index between 2012 and 2023, we find that greater competition significantly increases the likelihood of green bond issuance. Firms are more likely to issue green bonds when a greater proportion of their competitors have already done so, supporting the signaling theory, where firms use green bond issuance to communicate positive information about their financial stability and environmental commitments. Furthermore, competition from firms that have previously issued green bonds leads to an increase in the amount of green bonds issued, while competition from non-issuers has the opposite effect, aligning with the differentiation strategy. Our findings also highlight the influence of corporate governance in green bond issuance, showing that firms with a higher proportion of independent directors and female executives are more likely to adopt green financing. Additionally, firm size plays a significant role in green bond issuance. Large companies dominate the market, with superior access to capital markets, more financial resources, and better investors' confidence. In contrast, smaller firms, despite showing early interest in green bonds, face greater constraints that limit their ability to issue green bonds on a large scale. Macroeconomic factors such as trade openness and inflation also positively influence green bond issuance, and it indicates how the general economic environment affects firms' sustainable financing. These results connect green bond issuance to competitive pressures and provide valuable insights into how competitive forces, firm characteristics, and macroeconomic conditions collectively determine the adoption of sustainable financial practices worldwide. Understanding these dynamics is crucial for policymakers, investors, and business leaders seeking to foster green financing and accelerate the transition to a more sustainable economy.