Mitigating corporate maturity mismatch: The role of green bond issuance in China

Abstract

The rapid development of China's green bond market prompts a study into the effects of green bond issuance. This paper explores the impact of green bond issuance on corporate maturity mismatch. Using data from 241 Chinese listed companies from 2015 to 2021, we carry out empirical tests and find that: 1) Green bond issuance significantly mitigates corporate maturity mismatch. And this mitigating effect is observed during the issuance period, indicating that the green development principles inherent in green bonds can quickly influence corporate investment and financing decisions. 2) The issuance of green bonds affects maturity mismatches through two key channels: enhancing long-term investment intentions and alleviating financing constraints. 3) Companies with high ESG ratings and those issuing green bonds for the first time more effectively mitigate maturity mismatch issues when issuing green bonds. This paper provides robust evidence for the microeffect of rapid development of Chinese green bond market.