Market reaction to macroeconomic anouncements: green vs conventional bonds

Danny Contractor, Faruk Balli, Indrit Hoxha

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


There has been an increased interest in literature to examine the risk and returns between green and conventional bonds during the last decade. However, the existing literature is silent regarding investigating green bonds and their reactions to regional and global shocks. We attempt to close this gap by gathering green and conventional bonds data issued by the same firms. Using data from 262 firms that issue both sets of bonds and trade in the same market, we are able to control/eliminate for firm-specific factors that can impact the bond spreads. Upon introducing US and EU macroeconomic announcements and economic uncertainty, we find that the green bonds are more resilient from specific shocks, when compared to conventional bonds. We further expand our study to systematically assess the impact of the Covid-19 pandemic on both bonds. Our comprehensive findings suggest an increase in green bonds’ uptake post-Covid-19 pandemic, and its significant evolvement compared to pre-Covid-19 proves green bonds popularity. Our result shows greater resilience of green bonds from specific Covid-19 shocks and uncertainties.

Original languageEnglish (US)
Pages (from-to)1637-1662
Number of pages26
JournalApplied Economics
Issue number15
StatePublished - 2023

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


Dive into the research topics of 'Market reaction to macroeconomic anouncements: green vs conventional bonds'. Together they form a unique fingerprint.

Cite this