The effect of the stock price of the green bond issue by companies listed in China: A case study of the manufacturing industry

. Under the call for the construction of ecological civilization in the new era, the attention of the whole society to green finance has gradually increased. Among them, green bonds, as the largest and most mature green financial products in China's green finance market, have an increasing impact on social benefits and economic development. Taking the manufacturing industry as an example, this paper studied the stock price effect of 21 listed companies when they first announced green bond issuances through the event study method. The findings showed that publicly issued green bonds by listed manufacturers would make a significant positive impact on corporate share prices during the window period. This result showed that the issuance of green bonds would attract more equity investment, which was conducive to encouraging listed manufacturing companies to carry out green finance reform through the issuance of green bonds and contributed to the sustainable evolution of China's economy.

entire market, it has stronger targeting and universality compared to studying individual enterprises.While filling the gap in academic research, it has to some extent proven the impact and utility of green bonds in company stock prices, providing feasible directions and transformation momentum for green transformation in the future and upgrading of manufacturing companies.
The findings show that there are positive effects of green bond issuance on stock prices, contributing to encouraging more of the investors to invest in companies that issue green bonds.Thus, the transformation and upgrading of manufacturing companies will generate dual internal and external driving forces for the advancement of China's green bonds, providing a virtuous cycle for high-quality and sustainable development of the Chinese economy in the new era.
However, the sample of companies selected is relatively small since China's green bonds started late and the scale of manufacturing development is limited.
Secondly, in the main empirical and robustness analysis of the article, the market adjustment model and CAPM model are respectively used as the estimation model, and the model has limited explanation for the company value.
Therefore, the effectiveness of the results of this study is limited and cannot fully reflect the characteristics of the manufacturing industry and all influencing factors.The research conclusions are only for reference, and specific situations require specific analysis.

Literature review 2.1 International research
The development of green bonds abroad originated early.
In 2007, a successful climate awareness bond was issued by the European Investment Bank, which is considered to be the origin of the green bond practice.Since then, green bonds have gained increasing attention and recognition, and Western countries and organizations have vigorously promoted the practice of green bonds, leading to extensive and profound research and discussion in foreign academic circles.
With regards to the definition of green bonds, "the Green Bond Principles", jointly issued by a number of international commercial and investment banks in 2014, clearly state the definition of green bonds as a variety of bond instruments specifically designed to finance or refinance qualified green projects.Reichlet believes that green bonds are a channel for providing environmental and climate oriented investment for capital [1].Lanz stated that in the future, green bonds may become a policy tool and an important link in green economic development [2].
In terms of the utility of green bond enterprises, Bansal and Roth pointed out that the production and operation behavior of enterprises in line with social values is beneficial to enhancing corporate reputation [3].
Mathews and Kidney, based on signal transmission theory, suggest that companies implementing green strategies can increase their attractiveness to investors [4].
Flammer discovered with the event research approach that investors react positively to green bond issuance announcements and more strongly to initial offerings of green bonds and third-party awareness of bonds [5].For the stock market, Flammer, Klassen and McLaughlin indicate that a positive stock market reaction to corporate environmental behaviour is expected [6,7].Regarding whether shareholders can profit from green bonds, Tang and Zhang found that shareholders can net profits by recording stock price reactions to the issuance of green bonds [8].

Literature review in China
Among the earliest green financial bonds in China is "14Nuclear Wind Power MTN001" which was issued by CGN Wind Power Ltd. in the interbank market in 2014.Although China is a late starter in green bonds, the market is growing at a rapid pace and academic attention is increasing.
Before the release of specific documents, the Chinese academic community generally believed that green bonds were bond products that directly or indirectly financed climate and environmental sustainable development projects and plans [9].What distinguishes green bonds from ordinary bonds is the ultimate investment direction of the funds raised [10] ICDEBA 2023 In terms of the effectiveness of green bonds for companies, Ma Yaming and others based on the empirical analysis of Difference -in -Difference, the results show that green bonds have a significant effect on corporate value enhancement, and the investor sentiment and financing costs have a significant mesomeric effect in the process of value enhancement.The results show there is a significant impact of green bonds on firm value enhancement, and the investor mood and cost of financing have significant mediating effects in the process of value enhancement [11].Wang Qian and Li Xinda used MM theorem, Free cash flow hypothesis and financing pecking order theory to analyze the effects of green bonds on company performance [12].In terms of investor preference, Liang Zhihui used the event study to analyse that investors will show green preference in the face of market excess returns generated by green financing events [13].As for the market reaction, Chen Danning also showed that the issuance of green bonds has a remarkable positive influence on equity yield [14].
Zhu Junming et al. believe that the effect of green bonds on company stock returns is no different from regular bonds, and indicate that green bonds do not reflect a significant attraction to social investment [15].

Theoretical analysis and research assumptions
3.1 Theoretical support

Efficient market theory
In an effective market, the security price of a company should reflect all the information of the company.
Currently, stock prices in China's Shanghai and Shenzhen stock markets reflect historical information and are consistent with weakly efficient market theory.
Therefore, information that has already been publicly disclosed will not have an impact on stock prices, and only newly disclosed information will have a stock price effect.This paper can provide theoretical support for the study of the short-term impact on stock prices when Chinese listed companies first announce the issuance of green bonds.

Signal theory
The bond offer sends a signal that a company is confident in its financial position and adequate cash flow.
Moreover, compared to ordinary bonds, the threshold for issuing green bonds is higher.In addition to credit ratings for the main body and bonds, the issuing company also needs to prove the credibility of the company's green policies and their implementation.
Therefore, the green bond issue may indicate that the issuing company's overall rating is performing well.

Investor preferences
Investors are often accustomed to investing in a preferred investment strategy.With the increasing awareness of green and sustainable development, Green-favoring investors will prefer to issue green bonds and implement green environmental protection in companies.The increase in demand may have a positive impact on the share price of the company.Also, Green Investor participation is going to regulate the green development of the company, thus reducing agency costs.Therefore, when manufacturing companies issue announcements on documents related to green bond issuance, they cater to the investment preferences of risk aversion investors, which may attract more investors, thus improving the value of the company and reflecting it on the stock price.

Research assumptions
The paper conducted an empirical analysis by event study method based on the closing prices of 21 listed manufacturing companies that have issued green bonds.
Due to the small sample size of the company, this article adopts the t-test method to conduct a significance test on the empirical results.The initial assumption was a positive impact on the company's share price from the green bond offering announced by manufacturing companies, namely: When the test results reject the original hypothesis at a confidence level, and AARi>0 and CAARi>0, the announcement of green bond issuance by 21 listed companies in the manufacturing industry will have a significant positive impact on the company's stock price; on the contrary, when AARi<0 and CAARi<0, this event will negatively impact the company's share price in a significant way..
In order to study the response of stocks to green bond issuance, this article mainly studies the abnormal returns (AR) and cumulative abnormal returns (CAR) of stocks before and after the issuance of green bond related announcements.The relevant parameters are defined as follows (see Table 1): It is essential to calculate the average abnormal return (AARi,t) in order to study the impact of the event on the overall stock price.AARi,t is the average abnormal return rate of 21 companies calculated on the t-th trading day within a certain event window period, as follows: (6) As the research object of this article is the manufacturing industry, it is necessary to study the stock movements of multiple companies.Consequently, there is also a need to calculate the average cumulative abnormal returns for all firms within the same event window t, as follows: (7) Finally, a significance test is conducted on the average cumulative abnormal return rate to determine whether the company's announcement related to green bond issuance has a meaningful effect on the share price of the overall corporate sample.

Main regression results
In the empirical process, the event window period is first selected [-10, 10].The average abnormal return and the cumulative average abnormal return are calculated for the ten trading days around the date the firm announces the green bond issue.And plot the folded statistical graph of both returns.
According to Table 2, it is observed that the average abnormal returns of listed manufacturing firms are not significant during the window period, but the cumulative average return shows significant characteristics on the trading day before the event day (t=-1), and the significance increases on the trading day after the event day (t>0), showing a stable positive short-term stock price effect.The cumulative average abnormal return reached its maximum value of approximately 3.547% on the 10th trading day after the announcement, which is significant at the 95% confidence level.For the cumulative average abnormal return (CAAR), it gradually increases from the 9th trading day before the event date (t=-9).It reaches a maximum value of about 3.45% on the 10th trading day (t=10) after the event date.
The CAAR for the day before and on the day of the event was significant at a 90% confidence level, while it is significant at a 95% confidence level during the window period after the event date.The significance increases with the passage of time after the event.Return (%) t Between αi and βi is the estimated parameter of the market model.
As before, calculate the abnormal return (AR) and cumulative average abnormal return (CCAR) of stocks before and after the issuance of green bond related announcements.The regression results are as follows (see Table 4):   4 and Figure 2, the average abnormal return AAR for the event window of [-10,10] is still insignificant when using the CAPM model to estimate the theoretical price of the company's stock.
Negative average abnormal returns occur at t=-9 and t=8, but the overall average abnormal returns are mainly positive.It indicates that the information related to green bond issuance may affect the company positively.At t=6, AAR reaches its maximum value during the event window period, which is approximately 0.47%.
Compared to the results under the market adjustment model, the CAAR showed a significance of 90% confidence level at t=-2, and the cumulative abnormal return on the day of the event and after the event also showed a 95% confidence level.The CAPM model further enhances the significance of the regression results and proves the stability of the research results.the overall results showed little change.The CAAR for the 10 trading days surrounding the date of the event remains the most significant, with a slight increase in significance.
Summary: Through an empirical analysis of the share price effect of 21 manufacturing listed companies when they release information related to green bonds, a positive effect of green bond issuance on company share prices in the short-term was found.And from the first or two trading days before the announcement, there will be a noticeable positive impact on on the cumulative average abnormal return, which will increase with the increase of time after the event occurs, and the significance will also increase.Comparing the CAAR results of ten different event window periods, it was found that the significance of CAAR was strongest when Return (%) t AAR CAAR the event window period was set to [-10, 10], and this result was once again confirmed in the stability test.

Conclusion
The results of this paper's empirical study suggest that information on initial public offerings of green bonds by manufacturing companies listed in Shanghai and Shenzhen between 2016 and 2022 will have a noticeable positive share price impact on the cumulative average abnormal returns of the company's stock, but a weak positive share price impact on the average abnormal returns.There are slight changes in specific data during stability testing, but they do not change the final conclusion.This empirical result shows that manufacturing enterprises' green finance related behaviors will attract more investors.At the same time, it indicates that the green bond issue information has a significant stock price impact on manufacturing enterprises in the first or two trading days before the announcement is released, as well as in the following ten trading days, and the significance increases over time.
Therefore, for the Chinese manufacturing industry, issuing green bonds may have a positive impact on company value, and green bond issuance can be considered in the future green transformation and upgrading process of the manufacturing industry.
The majority of companies issuing green bonds in China's manufacturing sector are either leading enterprises or state-owned enterprises, according to the results of this sample screening.This finding suggests that China's green bond market is still in its infancy, that small and medium-sized businesses are underrepresented, and that the country is heavily dependent on government regulations.Therefore, as for how to implement green bonds in the manufacturing industry in the next step.

Figure 1
Figure 1 clearly indicates the variation of the AAR and the CAAR.During the window period, AAR fluctuates around 0, with little overall fluctuation and no significant significance.Except for AAR<0 at t=-9 and t=8, AAR>0 indicates that the information about green bond issues may affect positively the stock returns of listed firms.On the event date (t=0), the abnormal stock return AAR reaches a maximum value of about 0.47%.It shows that the stock market reacts quickly to the information released by the company, which is reflected

Figure 1 .
Figure 1.AAR and CAAR results during the event window period [-10,10] Finally, calculate the cumulative average abnormal return rate (CAAR) for ten different window periods for analysis and research.According to Tables 3, it can be seen that except for the two days before and after the announcement of green bond issuance [-1, 1], the CAAR under the other nine window periods all has a significant 95% confidence level.The results of the window period [-10, 10] are the most significant, indicating that the stock market has a positive attitude towards green bond model.The market yield is still the rise and fall of the CSI 300 index, and the risk-free yield is replaced by the yield of China's 10-year treasury bond bonds.In this case, when estimating the theoretical return, an estimation window needs to be set and the estimation window period does not overlap with the event window period.With the yield on the 10-year Chinese government bond fluctuating around 3.25%, the daily yield on the 10-year Chinese government bond is therefore about 0.013%.From the daily returns of 1009 stocks between the prior 110 and the prior 10 trading days of the event window, the regression model is as follows:

Figure 2 .
Figure 2. AAR and CAAR results during the event window period [-10,10] under the CAPM model As seen in Table4and Figure2, the average

First
and foremost, people should take into account the characteristics of the early stages of the evolution of China's green finance system, accelerate the government's welfare policies' downward trend, promote the reform of green finance for SMEs, and at the same time, the government ought to have an effective part in market supervision to encourage the rational distribution of market resources.Secondly, people should build a sound green bond development system, from the design of the top-level structure to the implementation of specific operations and establish a set of professional organizational structure to support the growth of the green finance industry from top to bottom.Finally, innovate and develop green bond products, actively support the growth of green businesses and initiatives.Taking green environmental protection and sustainable development as the basic principles, targeting the characteristics of customer groups and market demands, combined with financial technology, we will accelerate the launch of innovative green bond products, optimize product structure, and meet the diversified financing needs of market entities.

Table 1 .
Definition of parameters [-3,3],[-4,4],[-5,5],[-6,6],[-7,7],[-8,8],[-9,9],[-10,10]respectively, and conducted a significance study on ten window periods Estima tion window 100 trading days before the time window of each company [-110, -11] This article first selects a market adjustment model to estimate the theoretical return rate.Due to the market adjustment model replacing the theoretical return of a single stock with market return, there is no need to set an estimation window.Since the companies in the sample are quoted on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, the Shanghai and Shenzhen 300 indices are chosen to represent the overall market, and the rise and fall of the Shanghai and Shenzhen 300 indices represent market returns.The regression model is

Table 3 .
CAAR results during ten event window periods Since the market adjustment model was used to estimate the theoretical return rate, in more cases, the return rate of a single stock is very different from the market return rate.Therefore, this paper conducts a robustness test by changing the estimation model and selects the CAPM

Table 4 .
AAR and CAAR results within the event window period[-10,10]under the CAPM mode

Table 5 .
CAAR Results of Ten Event Windows under CAPM Model