Green bonds issuance, innovation performance, and corporate value: Empirical evidence from China

This study investigates the impact of green bond issuance on corporate performance and further checks the intermediate effect of corporate innovation performance on the primary relationship. This study uses the quarterly panel data of Chinese non-financial listed companies in 11 subdivided industry categories from January 1, 2016, to September 30, 2020. Using the difference-in-difference (DID) model and the parallel trend test, it is found that companies' issuance of green bonds has a significant positive effect on improving corporate innovation performance and corporate value. Furthermore, the improvement of innovation performance assists in enhancing the promotion effect of green bond issuance on corporate value. Despite data limitations, this study's findings can be very helpful for all relevant stakeholders, especially regulators, to introduce conducive policies to support the issuance of green bonds in Chinese. Our findings can be useful for other emerging markets that are dealing with the same green bond-based growth-sustainability conundrum.