We investigate the underlying reasons for a firm to issue green bonds using agency and stakeholder theory as frameworks. We testhow different proxies for each theory explain the decision to issue a green bond. We also test whether these proxies are relevant togreen bond issuance amounts. We perform logit and fixed effects regressions using a dataset of green bond issuers and non-issuersin 27 countries for the 2013 to 2017 period. Our findings suggest that the agency motive is a key determinant of the decision to issuea green bond. However, agency issues seem to have only a partial impact on the size of the green bond issuances.
{"title":"Determinants of green bond issuance: agency or stakeholder motives matter?","authors":"Dejan Glavas","doi":"10.54695/bmi.172.0004","DOIUrl":"https://doi.org/10.54695/bmi.172.0004","url":null,"abstract":"We investigate the underlying reasons for a firm to issue green bonds using agency and stakeholder theory as frameworks. We testhow different proxies for each theory explain the decision to issue a green bond. We also test whether these proxies are relevant togreen bond issuance amounts. We perform logit and fixed effects regressions using a dataset of green bond issuers and non-issuersin 27 countries for the 2013 to 2017 period. Our findings suggest that the agency motive is a key determinant of the decision to issuea green bond. However, agency issues seem to have only a partial impact on the size of the green bond issuances.","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"201 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131374464","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the relationship between Employee Stock Ownership (ESO) and voluntary carbon disclosures. Given that previous research has shown the beneficial effects of ESO on work attitudes and corporate performance, we link ESO and board representation with the attributes of voluntary climate-related disclosures. We use three proxies to capture these attributes: corporate decisions to respond to the Carbon Disclosure Project (CDP) annualquestionnaire; corporate decisions to make responses publicly available, and the quality of a firm’s disclosures on climate-changerelated risks and strategies to mitigate them. Our results show a positive association between ESO and decisions to both answer the CDP questionnaire, and make responses publicly available. In contrast, ESO does not seem to impact carbon disclosure quality. The findings contribute to the ongoing debate on the determinantsof voluntary climate change disclosures, highlighting the importance of ESO to enhance the transparency of voluntary disclosures of climate change business impacts.
{"title":"Employee stock ownership and voluntary carbon disclosure","authors":"Joseph Abdelnour, Nicolas S. Aubert, W. Ben‐Amar","doi":"10.54695/bmi.172.0060","DOIUrl":"https://doi.org/10.54695/bmi.172.0060","url":null,"abstract":"This paper investigates the relationship between Employee Stock Ownership (ESO) and voluntary carbon disclosures. Given that previous research has shown the beneficial effects of ESO on work attitudes and corporate performance, we link ESO and board representation with the attributes of voluntary climate-related disclosures. We use three proxies to capture these attributes: corporate decisions to respond to the Carbon Disclosure Project (CDP) annualquestionnaire; corporate decisions to make responses publicly available, and the quality of a firm’s disclosures on climate-changerelated risks and strategies to mitigate them. Our results show a positive association between ESO and decisions to both answer the CDP questionnaire, and make responses publicly available. In contrast, ESO does not seem to impact carbon disclosure quality. The findings contribute to the ongoing debate on the determinantsof voluntary climate change disclosures, highlighting the importance of ESO to enhance the transparency of voluntary disclosures of climate change business impacts.","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123696875","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the impact of the COVID-19 crisis on the valuation of CO2 emissions by investors. Using the sample constituted by large French companies (SBF 120) having published their carbon emissions from 2016 to 2021, we show that investors are sensitive to firms’ carbon emissions and value them negatively over the period regardless the environmental sensitivity of the firm’s activity sector. We also demonstrate that under the pressure of the COVID-19 crisis, investors penalize more heavily high polluting firms while their valuation of low polluting firms does not seem to be impacted by the crisis. Therefore, our findings suggest that it is important for firms, especially high-emitting firms, to continue to reduce their carbon emissions in order to earn andmaintain investors’ confidence after the crisis. Our managerial contribution emphasizes the confirmation that the COVID-19 shock could be a good opportunity for both firm and investor to pursue their clean technologies development and investment to deal with climate change.
{"title":"Investors’ valuation of corporate CO2 emissions: the impact of the COVID-19 crisis","authors":"E. Fromont, Le Hoa VO Le Hoa VO, Gulliver Lux","doi":"10.54695/bmi.172.0015","DOIUrl":"https://doi.org/10.54695/bmi.172.0015","url":null,"abstract":"This study examines the impact of the COVID-19 crisis on the valuation of CO2 emissions by investors. Using the sample constituted by large French companies (SBF 120) having published their carbon emissions from 2016 to 2021, we show that investors are sensitive to firms’ carbon emissions and value them negatively over the period regardless the environmental sensitivity of the firm’s activity sector. We also demonstrate that under the pressure of the COVID-19 crisis, investors penalize more heavily high polluting firms while their valuation of low polluting firms does not seem to be impacted by the crisis. Therefore, our findings suggest that it is important for firms, especially high-emitting firms, to continue to reduce their carbon emissions in order to earn andmaintain investors’ confidence after the crisis. Our managerial contribution emphasizes the confirmation that the COVID-19 shock could be a good opportunity for both firm and investor to pursue their clean technologies development and investment to deal with climate change.","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"65 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117143798","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Given the amounts at stake to make the planet more sustainable in the coming years, at least at the European level, public investment will certainly not be sufficient to channel the necessary sums. It therefore seems essential to direct private financial flows into activities that are compatible with the general direction taken. We wanted to question the capacity of young French people of Z Generation, who are the investors of tomorrow, to take on the role of future sustainable investors. We highlighted three groups of individuals with different knowledge and attitudes towards traditional and sustainable investment. Oneof these groups, representing more than half of the respondents, includes individuals with the most favorable attitude towards sustainable investment, but with little knowledge of investment and a rather negative attitude towards traditional investment. These results lead us to wonder about the origins of this attitude towards sustainable investment.
{"title":"Are Z Generation young people potential investors in sustainable finance?","authors":"Nadège Ribau-Peltre","doi":"10.54695/bmi.172.0023","DOIUrl":"https://doi.org/10.54695/bmi.172.0023","url":null,"abstract":"Given the amounts at stake to make the planet more sustainable in the coming years, at least at the European level, public investment will certainly not be sufficient to channel the necessary sums. It therefore seems essential to direct private financial flows into activities that are compatible with the general direction taken. We wanted to question the capacity of young French people of Z Generation, who are the investors of tomorrow, to take on the role of future sustainable investors. We highlighted three groups of individuals with different knowledge and attitudes towards traditional and sustainable investment. Oneof these groups, representing more than half of the respondents, includes individuals with the most favorable attitude towards sustainable investment, but with little knowledge of investment and a rather negative attitude towards traditional investment. These results lead us to wonder about the origins of this attitude towards sustainable investment.","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124373692","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In recent years, an increasing number of major international banks have begun to announce their exit from the coal sector, in response to the trend initiated by public actors such as governments and related public sector financial institutions. This article examines the determinants of coal exit strategies of international banks. Using a sample of 111 banks from 31 countries and a PLSPM methodology, the results show that: 1) the announced strategies are particularly partial in nature and the financing allocated to coal firms is still high, 2) external variables (i.e., national and institutional contexts) significantly influence exit scores, notably coal dependence, progress in the energy transition and the environmental performance of the home countries, 3) with the exception of size, internal variables (e.g., exposure to the sector, risk and profitability) have no impact on coal exit scores. Banks therefore adopt a defensive strategy: the managerial decision echoes national energy and environmental policies, which underlines the crucial political and regulatory role of governments in influencing bank strategies.
{"title":"Determinants of coal exit strategy in the banking industry","authors":"Benoît Jamet, Julien Bousquet, Antoine Massé","doi":"10.54695/bmi.172.0041","DOIUrl":"https://doi.org/10.54695/bmi.172.0041","url":null,"abstract":"In recent years, an increasing number of major international banks have begun to announce their exit from the coal sector, in response to the trend initiated by public actors such as governments and related public sector financial institutions. This article examines the determinants of coal exit strategies of international banks. Using a sample of 111 banks from 31 countries and a PLSPM methodology, the results show that: 1) the announced strategies are particularly partial in nature and the financing allocated to coal firms is still high, 2) external variables (i.e., national and institutional contexts) significantly influence exit scores, notably coal dependence, progress in the energy transition and the environmental performance of the home countries, 3) with the exception of size, internal variables (e.g., exposure to the sector, risk and profitability) have no impact on coal exit scores. Banks therefore adopt a defensive strategy: the managerial decision echoes national energy and environmental policies, which underlines the crucial political and regulatory role of governments in influencing bank strategies.","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127753288","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article examines the financial education needed to achieve responsible finance. Responsibility here is considered in the broadest sense, i.e. towards company stakeholders, but also towards society and future generations. Given that finance is not only a social science and that it also includes a moral dimension, we first argue for a minimum financial education for all citizens, a condition for inclusive finance. We then outline some major changes that are intended to structure responsible financial education. The conclusions drawn concern academics and researchers working in financeas well as managers of financial institutions.
{"title":"Responsible finance and financial literacy","authors":"Frédéric Lobez","doi":"10.54695/bmi.172.0085","DOIUrl":"https://doi.org/10.54695/bmi.172.0085","url":null,"abstract":"This article examines the financial education needed to achieve responsible finance. Responsibility here is considered in the broadest sense, i.e. towards company stakeholders, but also towards society and future generations. Given that finance is not only a social science and that it also includes a moral dimension, we first argue for a minimum financial education for all citizens, a condition for inclusive finance. We then outline some major changes that are intended to structure responsible financial education. The conclusions drawn concern academics and researchers working in financeas well as managers of financial institutions.","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127694804","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Stéphane Goutte, Ron Grosse, H. Le, Fei Liu, Hans-Jörg von Mettenheim
In this paper, we introduce a novel news sentiment database and analyze its potential applications in the financial markets via several trading experiments. We analyze the predictability of the news sentiment (both general news and ESG-related news) on the return of European stocks and the potential of applying them as a proper trading strategy over seven years from 2015 to 2023. We find that sentiment indicators such as Tone, and Polarity show significant relationships to the return of the stock price. Those relationships can be exploited, even in the most naive way, to create trading strategies that can be profitable and outperform the market. Furthermore, among the indicators, those extracted from ESG-related news tend to show better performance. This sentiment database is available through a bespoke app at the website https://esg.cafe
{"title":"Portfolio management with ESG news sentiment","authors":"Stéphane Goutte, Ron Grosse, H. Le, Fei Liu, Hans-Jörg von Mettenheim","doi":"10.54695/bmi.172.0072","DOIUrl":"https://doi.org/10.54695/bmi.172.0072","url":null,"abstract":"In this paper, we introduce a novel news sentiment database and analyze its potential applications in the financial markets via several trading experiments. We analyze the predictability of the news sentiment (both general news and ESG-related news) on the return of European stocks and the potential of applying them as a proper trading strategy over seven years from 2015 to 2023. We find that sentiment indicators such as Tone, and Polarity show significant relationships to the return of the stock price. Those relationships can be exploited, even in the most naive way, to create trading strategies that can be profitable and outperform the market. Furthermore, among the indicators, those extracted from ESG-related news tend to show better performance. This sentiment database is available through a bespoke app at the website https://esg.cafe","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134489907","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper extends the study of Bourghelle et al. (2022) to check whether collective emotions could help forecast bitcoin volatility over the period 2018-2021. To this end, we first assess whether consideration of investor sentiment and collective emotions can give us clearer insights into bitcoin dynamics over the period in question and whether it can help to explain the different shifts in price. Formally, we ran causality tests and, as in Bourghelle et al. (2022), built a two equation nonlinear vector autoregressive (VAR) model to assess for further lead-lag effects between bitcoin volatility and collective emotions. Second, we proposed in-sample forecasts of bitcoin volatility to test whether it would be possible to improve our forecasts by taking investors’ emotions and sentiment into account. Our findings show that market sentiment and investors’ emotions provide useful information that can explain shifts, structural breaks, and changes in bitcoin volatility. Further, collective emotions improve bitcoin volatility forecasting as our nonlinear model, including emotions-related news, supplants the benchmark linear model.
{"title":"Can Collective Emotions Improve Bitcoin Volatility Forecasts?","authors":"Fredj Jawadi","doi":"10.54695/bmi.171.6997","DOIUrl":"https://doi.org/10.54695/bmi.171.6997","url":null,"abstract":"This paper extends the study of Bourghelle et al. (2022) to check whether collective emotions could help forecast bitcoin volatility over the period 2018-2021. To this end, we first assess whether consideration of investor sentiment and collective emotions can give us clearer insights into bitcoin dynamics over the period in question and whether it can help to explain the different shifts in price. Formally, we ran causality tests and, as in Bourghelle et al. (2022), built a two equation nonlinear vector autoregressive (VAR) model to assess for further lead-lag effects between bitcoin volatility and collective emotions. Second, we proposed in-sample forecasts of bitcoin volatility to test whether it would be possible to improve our forecasts by taking investors’ emotions and sentiment into account. Our findings show that market sentiment and investors’ emotions provide useful information that can explain shifts, structural breaks, and changes in bitcoin volatility. Further, collective emotions improve bitcoin volatility forecasting as our nonlinear model, including emotions-related news, supplants the benchmark linear model. \u0000 ","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"119 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123482259","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines information dissemination across G7 markets for Bitcoin, stocks, and oil before and during the COVID-19 pandemic. We used a vector autoregressive model and impulse response function to analyze data. Our findings suggest that the pandemic has had a considerable effect on increasing the directional causalities and time-varying connectedness between Bitcoin, oil, and G7 stock indices during the crisis. Bitcoin significantly influences oil and stock returns during the pandemic. Moreover, the response of Bitcoin to shocks in stocks returns is more pronounced for France, Germany, Italy, and the United Kingdom than Japan, the United States, and Canada. The results could aid investors with portfolio diversification and hedging strategy in different G7 stock markets.
{"title":"What do we know about assets’ behavior and connectedness between Bitcoin, oil, and G7 stocks amid the COVID-19 pandemic?","authors":"H. Obeid, Aymen Turki, A. Jeribi, S. Loukil","doi":"10.54695/bmi.171.6762","DOIUrl":"https://doi.org/10.54695/bmi.171.6762","url":null,"abstract":"This study examines information dissemination across G7 markets for Bitcoin, stocks, and oil before and during the COVID-19 pandemic. We used a vector autoregressive model and impulse response function to analyze data. Our findings suggest that the pandemic has had a considerable effect on increasing the directional causalities and time-varying connectedness between Bitcoin, oil, and G7 stock indices during the crisis. Bitcoin significantly influences oil and stock returns during the pandemic. Moreover, the response of Bitcoin to shocks in stocks returns is more pronounced for France, Germany, Italy, and the United Kingdom than Japan, the United States, and Canada. The results could aid investors with portfolio diversification and hedging strategy in different G7 stock markets.","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129263800","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the connectedness between G7 indices, Bitcoin, and oil during the COVID-19 pandemic. Based on daily data from January 1, 2016 to April 1, 2021, a vector auto-regression model and an impulse response function are employed to illustrate the time path of these assets following own and cross-shocks. Our study exhibits the considerable effect of the pandemic on increasing directional causalities and time-varying connectedness between G7 indices, Bitcoin, and oil. The findings indicate that G7 indices’ own shocks almost immediately lower forecasts of stock return urging the diversification to reduce risk. Moreover, the significant negative response of oil to shocks amid the pandemic reflects its high vulnerability during mitigated periods. Unlike other countries, we find a relative resilience of Bitcoin to S&P 500 shocks, and we consequently recommend Bitcoin as a diversifier to Americaninvestors during the pandemic. Our results are useful for both investors and policymakers who need to think ahead, rather than waiting to have a downside G7 returns movement in turbulent periods.
{"title":"Connectedness between conventional and digital assets amid COVID-19 pandemic: Evidence from G7 stocks, Oil and Bitcoin","authors":"Aymen Turki, A. Obeid, S. Loukil, A. Jeribi","doi":"10.54695/bmi.171.8460","DOIUrl":"https://doi.org/10.54695/bmi.171.8460","url":null,"abstract":"This study examines the connectedness between G7 indices, Bitcoin, and oil during the COVID-19 pandemic. Based on daily data from January 1, 2016 to April 1, 2021, a vector auto-regression model and an impulse response function are employed to illustrate the time path of these assets following own and cross-shocks. Our study exhibits the considerable effect of the pandemic on increasing directional causalities and time-varying connectedness between G7 indices, Bitcoin, and oil. The findings indicate that G7 indices’ own shocks almost immediately lower forecasts of stock return urging the diversification to reduce risk. Moreover, the significant negative response of oil to shocks amid the pandemic reflects its high vulnerability during mitigated periods. Unlike other countries, we find a relative resilience of Bitcoin to S&P 500 shocks, and we consequently recommend Bitcoin as a diversifier to Americaninvestors during the pandemic. Our results are useful for both investors and policymakers who need to think ahead, rather than waiting to have a downside G7 returns movement in turbulent periods.","PeriodicalId":142010,"journal":{"name":"Bankers, Markets & Investors","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125298329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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