{"title":"Is carbon price uncertainty priced in the corporate bond yield spreads? Evidence from Chinese corporate bond markets","authors":"Bin Li, Han Wang, Yanyi Ye","doi":"10.1016/j.irfa.2025.104618","DOIUrl":null,"url":null,"abstract":"<div><div>This study aims to explore the impact of carbon price uncertainty on corporate bond yield spreads using an extensive data set of Chinese corporate bonds issued by publicly listed firms between May 2014 and December 2022. The study finds that the carbon price uncertainty raises the corporate bond yield spreads. Two economic channels are identified through which carbon price uncertainty affects corporate bond yield spreads: credit risk and bond liquidity. The study's results are robust to alternative measures of the carbon price uncertainty, yield spreads, fixed effects, and alternative samples. The impact of carbon price uncertainty on bond yield spreads is more pronounced for firms with higher corporate energy consumption, lower corporate information transparency, and the release of carbon trading regulatory policy. This study suggests that carbon price uncertainty is one of the important determinants of corporate bond pricing.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"107 ","pages":"Article 104618"},"PeriodicalIF":9.8000,"publicationDate":"2025-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Financial Analysis","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1057521925007057","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study aims to explore the impact of carbon price uncertainty on corporate bond yield spreads using an extensive data set of Chinese corporate bonds issued by publicly listed firms between May 2014 and December 2022. The study finds that the carbon price uncertainty raises the corporate bond yield spreads. Two economic channels are identified through which carbon price uncertainty affects corporate bond yield spreads: credit risk and bond liquidity. The study's results are robust to alternative measures of the carbon price uncertainty, yield spreads, fixed effects, and alternative samples. The impact of carbon price uncertainty on bond yield spreads is more pronounced for firms with higher corporate energy consumption, lower corporate information transparency, and the release of carbon trading regulatory policy. This study suggests that carbon price uncertainty is one of the important determinants of corporate bond pricing.
期刊介绍:
The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.