On the Corporate Use of Green Bonds – Journal of Economics & Management Strategy – article

On the Corporate Use of Green Bonds

Mark Bagnoli, Susan G. Watts | Journal of Economics & Management Strategy

2019-10-22

When do wholesalers issue green bonds to finance their socially responsible activities instead of charging a premium for the products they produce? We show that in less competitive retail markets when retailers can “skim” more of the premium that end consumers pay for socially responsible products, green bonds provide additional funds to help cover the cost of a wholesaler’s socially responsible activities. Similar incentives arise if the wholesaler’s input is a small component of the end consumers’ product, or if it is difficult for end consumers to identify the wholesaler’s socially responsible activities.

Bookmark

Your comment

Scroll to Top