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How do global financial markets affect the green bond markets? Evidence from different estimation techniques

Abstract
The green bond market has significantly improved in recent years thanks to the development of financial instruments and the rising climate change concerns. Given this backdrop this paper investigates the effects of returns in different financial markets i.e. the United States Treasury Bonds the Standard & Poor’s stock market the United States Dollar Gold Crude Oil and Bitcoin on the Green Bond returns (the Standard & Poor’s Green Bond Index) from September 17 2014 to September 1 2022. The results from the robust linear and machine learning estimators indicate that the returns of the United States Treasury Bonds and the United States Dollar are negatively related to the Green Bond returns. Meanwhile Gold returns positively affect Green Bond returns. The quantile regression estimations of Machado–Santos Silva also show that these findings are valid in different quantiles. The paper also discusses policy implications related to climate change and the development of financial instruments to promote green investments.
Authors
Kutay Gozgor and Mesut Karakas
Keywords
Rank
0.85
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Machine Learning
Series
Economic Research-Ekonomska Istraživanja 2023 vol. 36 issue 2 2177703
Time Added
2024/03/11 03:44
Total Downloads
0
Year Published
2023
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