Topic: Green Labeling

Speaker: Hanyi (Livia) Yi, Assistant Professor of Finance, Boston College Carroll School of Management

Time: 10:00am-11:30am, June 7 (Beijing Time)

Location: 4-101

Abstract:

We use a natural experiment in the U.S. municipal bond markets to study the financial and real effects of green bond labeling. Comparing bonds that finance similar projects but only some of which are (exogenously) labeled green, we find little evidence that a green bond label significantly affects bond yields, issuance amounts, or local governments' subsequent environmental performance. However, the green label increases ownership concentration,  particularly among ESG-focused funds. Moreover, issuing governments are more likely to make formal sustainability pledges subsequently, and issuers in Democratic states are more inclined to undertake the green label,  indicating that political incentives may drive labeling. Overall, our results suggest that green bonds are mainly used for signaling purposes and do not have a significant impact on tangible environmental outcomes.

About the speaker:

Hanyi (Livia) Yi is an Assistant Professor of Finance at Boston College's Carroll School of Management. Her research interests are in the areas of corporate finance, public finance, entrepreneurship, and urban economics. Professor Yi’s research has appeared in leading academic journals including the Journal of Financial Economics and the Journal of Public Economics. Her research has also been covered in popular media outlets such as The Economist, Forbes, and Business Insider. Professor Yi holds an undergraduate degree in finance and physics from the University of Notre Dame, and a Ph.D. in finance from Rice University.