Greenium in the Chinese corporate bond market.

This paper explores the pricing implications of green bonds in the Chinese corporate bond market. We document a large greenium in the Chinese green bond market, whereby green bonds are issued at lower offering yield spreads in the primary market and traded at lower yields in the secondary market. The magnitude of the Chinese greenium is substantially greater than other international green bond markets. Exploring the underlying mechanisms, we document convincing evidence that mitigation of information asymmetry and exposure to salient environmental stimuli such as air pollution are plausible explanations of the greenium. • Green certification has pricing implications in the Chinese corporate bond market. • This study documents a greenium in the Chinese bond market. • Green bonds are issued at lower offering yield spreads in the primary market. • Green bonds are traded at lower yields in the secondary market. • The Chinese greenium is greater than other international green bond markets. [ABSTRACT FROM AUTHOR]