Thesis Defense
Why do firms issue green bonds?

Dejan Glavas - PhD candidate in the PhD programme ESCP

Dejan Glavas, PhD candidate in the PhD programme ESCP, publicy defended his PhD thesis in Management Sciences.

25 September 2020
ESCP Business School Campus République


This thesis topic is the green bond market and the incentives pushing firms into issuing this new type of security. Three key hypotheses were stated to explain the motive for a firm to issue a green bond. The first hypothesis (“long-term value creation”) asserts green bond issuers invest in green technologies to generate long-term value. The second hypothesis (“delegated philanthropy”), professes stakeholder pressure engenders the fundamental reason for a firm to issue green bonds. The third hypothesis (“agency view”) contends that managers of green bond issuing firms serve their own objectives. This thesis aims at testing these hypotheses through three empirical articles and a synthesis article added in the appendix.

The first article’s main topic deals with green bond issuer governance, reflecting the state as a shareholder vitally affects the decision to issue green bonds. Moreover, we find that the link between state ownership and the likelihood to issue green bonds is stronger in states with weak institutions. These results confirm that the state is a key stakeholder in the decision to issue green bonds.

The second article explores the stock price reaction to a firm’s green bond issuance announcement. We analyze the consequences for shareholders of two types of events. The first type of event is one of increasing regulatory pressure and the second type of event is one of decreasing regulatory pressure. To test the first type of event, we use the Paris Agreement and to test the second type of event we use the 2016 U.S. presidential election results.

The third article shows green bond issuers initially confront more financial constraints. These financial constraints increase after the first green bond issuance. These firms also suffer from information asymmetries which explains their interest in green bonds.

Finally, in the appendix, we have added an article that first provides an overview of the current research on green bonds. This article also tackles the key question of regulations that may help the development of the green bond market.



  • Mr Franck Bancel
    Professor, ESCP Business School


  • Mr Pascal Dumontier,
    Professeur des universités, Université Paris-Dauphine, Université Paris 2 Panthéon Assas
  • Mr Franck Lecocq,
    Ingénieur Général des Ponts, des Eaux et des Forêts, AgroParisTech


  • Mr Christophe Moussu,
    Professor , ESCP Business School
  • Mr Patrice Geoffron,
    Professor, Professor, Université Paris-Dauphine