Freriks, Julian (2023) Stock Market Reactions to REIT Green Bond Issuance Announcements. Master thesis.
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Master Thesis Julian Freriks S3444686 - 30062023.pdf Download (2MB) | Preview |
Abstract
Real estate companies need to make substantial investments aimed at reducing the carbon footprint of their assets to align with the climate net-zero goals the Paris Agreement. This commitment is crucial because the real estate sector plays a substantial role in contributing to greenhouse gas emissions. The financing sector developed green bonds as one of the solutions to secure the necessary funding for environmentally sustainable investments. This master’s thesis examines the stock market reactions to REIT green bond issuances by employing an event study methodology over 34 green bonds issued by sixteen U.S. REITs over the period 2013-2023, The findings indicate no stock market reactions to green bonds issuances on an aggregate level. However, for first-time green bond issuers, the stock market consistently generates negative reactions, with cumulative abnormal returns ranging from -1.28% to -1.57%, depending on the asset pricing model employed. The results are robust to various asset pricing models and event windows. The findings suggest that first-time green bond issuance announcements are a credible signal of the REIT’s commitment towards climate friendly investments, which leads equity investors to re-evaluate their investment portfolios. The negative stock market reaction becomes less pronounced as REITs become seasoned green bond issuers.
| Item Type: | Thesis (Master) |
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| Degree programme: | Real Estate Studies |
| Supervisor: | Liu, X. |
| Date Deposited: | 11 Jul 2023 09:52 |
| Last Modified: | 11 Jul 2023 09:52 |
| URI: | https://frw.studenttheses.ub.rug.nl/id/eprint/4230 |
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