Impact of cities’ issuance of green bonds on local firm performance: evidence from China

Given the escalating momentum of Chinese green bond (CGB) issuances, this study aimed to elucidate the intricate relationship between CGB issuances and firm performance. Our findings indicate a significant spillover effect stemming from green government and green financial bonds, whereas the impact on green corporate bonds was relatively subdued. Intriguingly, the data reveals that environmentally conscious companies are disproportionately benefiting from cities’ issuance of CGBs. Upon delving into the underlying mechanisms, we observed a noticeable improvement in firm performance, especially for eco-friendly companies, who gain from enhanced total factor productivity and reduced debt. This data underscores the far-reaching and beneficial impact of CGBs.