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Item Green finance sources in Iberian listed firms: A socially responsible investment approachAutores: Leitao, Joao; Ferreira, Joaquim; Santibáñez González, ErnestoClimate change and implementation of the European Green Deal have raised the demand for ecologically friendly financial products and green finance, particularly fixed-income instruments such as green bonds. Given the scarcity of research on the simultaneous effects of market and accounting-based characteristics when combined with green business innovation ability, the purpose of this study is to determine whether market-based and firm accounting variables, as well as environmental technological innovation, play a role in the decision to issue green bonds. Four Limited Dependent Variable models are used, and the results show that market size and market liquidity are the most important predictors of green bond issuance, with proportionate positive and negative effects. Green bond issuance is also impacted by the size factor and environmental technological innovation. Because assets and capitalization are used as collateral when issuing green debt, the current empirical findings demonstrate that size is an essential component in market accounting features other than green bonds, which portray themselves as a hedge market to stock market liquidity. Environmental technological innovation drives green bond issuance because it acts as a market signalling mechanism for a socially responsible company strategy, providing critical information to decision-makers, managers, and investors.Item Green bonds, sustainable development and environmental policy in the European Union carbon marketAutores: Leitao, Joao; Ferreira, Joaquim; Santibánez González, ErnestoThis study assesses the non-linear effects of green bonds, conventional bonds and energy commodities on the behaviour of the cap-and-trade European Union carbon market (European Union Emissions Trading System [EU-ETS]). By estimating four models, using Markov-switching (MS) econometric methodology, non-linearities are confirmed in dynamic behaviours, observing in the global calculation a positive effect of green bonds (S&P Green and Sol Green) on the carbon market, in regimes of both high and low volatility, whereas conventional bonds (S&P Agg) and energy commodities (DJCI En) contribute to a decrease in the carbon market in regimes of high volatility. The relevance of green bonds is underlined in determining the behaviour of the carbon market, besides observing greater persistence of the low volatility regime. These results allow both investors and fund managers to implement strategies in different volatility or economic activity contexts through a diversified portfolio and green/climate structure.
