Impact of Country-Level Factors on Green Bonds Issuance: Comparison Between BRICS and G7 Countries

Sustainable finance products that consider ESG standards have been used in recent years, especially for dealing with the adverse effects of climate change. Investors’ demand and awareness of green finance have made Green bonds (GB) highly used as a debt instrument to finance projects with positive environmental impacts. Although the issuance of green bonds has increased globally, the expansion of the green bond market varies among different countries. Therefore, identifying the factors affecting GB issuance in different countries and comparing them can help better understand this gap. In this research, the impact of several country-level variables on the issuance of green bonds is studied for the G7 and BRICS countries. For this purpose, data related to macroeconomic, social, and environmental variables from 2014 to 2022 were Gathered and analyzed by regression models for panel data, including pooled OLS, fixed effect, and random effect. The results can show significant relationships between green bond issuance and some of the independent variables such as population, ESG risk index, credit rating, inflation rate, and fiscal balance.