Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Determinants of green bond premium in the ASEAN market amidst the COVID-19 pandemic

Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Determinants of green bond premium in the ASEAN market amidst the COVID-19 pandemic

green bonds; fixed-effect regression; premium; use of proceeds

Green bonds as a means of financing instrument for sustainable projects have caught the eyes of investors in recent years. With the growth of the global green bond market exceeding 50% in 2019 (CBI, 2019), green bonds serve as a promising financial instrument for organizations and a promising financial asset for investors. Previous studies have conflicting results in identifying the premium investors pay for investing in green bonds
where both a positive and negative premium was observed. This study aims to examine the premium of green bonds issued in Southeast Asia before and during the COVID-19 pandemic from March 2016 to April 2021 by using a two-step regression model. In the first step, by employing a fixed-effect model to 42 green bonds, the results of this study suggest
a positive green bond premium before the COVID-19 pandemic and a negative green bond premium during the pandemic. Additionally, this study conducts cross-section regressions to investigate the determinants of green bond premium. The results imply that rating, currency, issue amount, and time to maturity significantly affect the green bond premium.

Laurent Oktavio, Ririen Setiati Riyanti

DOI: 10.26905/jkdp.v25i4.6356

Universitas Merdeka Malang

October 2021

Sri Wahyuni

ISSN: 2443-2687 (Online) ISSN: 1410-8089 (Print)

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Jurnal Keuangan dan Perbankan Universitas Merdeka Malang