The impacts of green bond issuance on stock markets within the scope of sustainable finance

Recently, there has been a growing interest in green financial products along with traditional financial instruments in global financial markets. Governments, organizations and market participants have been particularly attracted to green bonds as they have many advantages. The impact of green bond issuances, which are attractive in terms of cost advantage and return, on companies' stocks has also been the subject of research and different results have been obtained. In this study, the stock returns of companies that regularly issue green bonds, green bond index, green stock index and stock market index returns are analyzed and explained with the help of panel data analysis and causality analysis. The other empirical analysis measures the volatility between green financial products (green bond index, green equity indexes) and a portfolio constructed from indices that are highly popular in the literature and in the markets. The analysis and findings revealed that there is a significant relationship between stock returns and stock market index returns and green stocks, while there is no relationship with the green bond index. It has been observed that green bond issuances have no effect on companies' stock returns.