Are green, climate-change and corporate bonds substitutes or complements? Evidence from a fourier specification

We estimated elasticities for climate-change, green and corporate bonds. Consistent with demand theory, own-price elasticities are negative. These assets are generally substitutes, but exhibit some complementarity between climate-change and green bonds early in the sample. Thus, companies issuing bonds may want to issue both types of bonds allowing potential bond holders to diversify their portfolios. Climate-change and corporate bond budget elasticities generally exceed unity, while green bond budget elasticities are generally inelastic. These budget elasticities indicate that corporations should expect these markets to grow with economy.