Do the green bonds overreact to the COVID-19 pandemic?

How reactive is investment in US green bonds and ESG-eligible stocks in times of crisis? Exploring the COVID-19 crisis

“…Therefore, the significant fall in returns of green bonds and ESG indices during the worst moments of the COVID-19 pandemic also reflects a strong negative sentiment among environmentally friendly investors. These findings are in line with results obtained by prior studies conducted in the US (e.g., Cui et al, 2022 ; Dutta et al, 2021 ; Umar & Gubareva, 2021 ; Umar et al, 2021 ). Interestingly, the nonlinear specification offers similar results in some “qualified” and narrow stock markets other than green/ESG indices such as the Dow Jones, but fails to be an accurate representation of the S&P500.…”

“…However, the extant findings are not conclusive. Some studies find that the markets linked to the investment in sustainable products exhibit better behavior (whether in terms of returns, risk, volatility or hedging effectiveness) compared to conventional markets during the specific COVID-19 pandemic period examined (e.g., Broadstock et al, 2021 ; Yi et al, 2021 ), while others report either underperformance of the former type of markets (e.g., Cui, Suleman, & Zhang, 2022 ; Dutta, Bouri, & Noor, 2021 ; Folger-Laronde et al, 2022 ), do not find significant differences (e.g., Capelle-Blancard, Desroziers, & Zerbib, 2021 ; Chiappini, Vento, & De Palma, 2021 ; Demers et al, 2021 ; Pavlova & de Boyrie, 2022 ), or even note contradictory results (e.g., Gianfrate, Kievid, & van Dijk, 2021 ; Hacıömeroğlu, Danışoğlu, & Güner, 2022 ; Omura, Roca & Nakai, 2021 ; Umar & Gubareva, 2021 ; Umar et al, 2021 ).…”

Time series analysis of GSS bonds

“…Explore the concept of greenium further and see how this relates to other indices and varies over time for example pre-and post-COVID. For example, Cui et al (2022) examines how green bonds have reacted to the COVID pandemic. 5.…”

Is there any recovery power for economic growth from green finance? Evidence from OECD member countries

“…The results of conducting a recourse model confirmed the positive role of issued green bonds on biopower and biofuels in Taiwan. Cui et al ( 2022 ) studied the green bonds market under COVID-19. They concluded that the market of green bonds was affected harshly by the consequences of COVID-19.…”