The spillover effects of green bond issuance: a study based on Chinese firms’ stock price synchronicity

This study examines the impact of green bond issuance on stock price synchronicity among peer companies in the Chinese listed firms from 2013 to 2021. The findings reveal that the issuance of green bonds leads to a decrease in stock price synchronicity among peer companies, particularly within industries characterized by higher levels of competition. By employing machine learning techniques to identify green-innovation textual information in green bond prospectuses, we find that a higher proportion of green-innovation textual information, particularly company-specific and forward-looking information, strengthens the spillover effects of green bond issuance. Mechanism tests demonstrate that expanding investor information channels and improving information disclosure quality among peer companies are the main pathways through which green bond issuance generates spillover effects. In terms of economic consequences, we find that the spillover effects of green bond issuance contribute to reducing financing constraints among peer companies and enhancing environmental performance. This research focuses on analyzing the spillover effects of green bond issuance, contributing to the existing literature on green bonds and highlighting the significant role of green bond pilot programs in enhancing the overall efficiency of capital market resource allocation.