Hoang, Bao Trung ORCID: https://orcid.org/0000-0003-1130-0300, Benbouzid, Nadia ORCID: https://orcid.org/0009-0006-8487-4881, Mallick, Sushanta and Stojanovic, Aleksandar (2025) Green loans and firm performance evidence of signalling and impact investing effects. European Financial Management. ISSN 1354-7798 (Print), 1468-036X (Online) (doi:10.1111/eufm.70003)

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Abstract

Green loans, costlier than sustainable bonds, are mainly used by smaller firms. This research examines 439 green loans issued to 299 non-financial firms during 2016-2023, assessing whether they signal environmental commitment or generate impact. Findings support both Signalling and Impact Investing theories. Share prices show abnormal returns around announcements, especially for subsequent loans. Post-loan, firms see a 1.1%–1.2% rise in operating income relative to assets and a 0.11–0.13 kg CO₂ reduction per $1,000 revenue. Loan size has limited impact, while loan conditions matter more. Green loans offer both financial and environmental benefits, reinforcing their role in sustainable development.

Item Type:	Article
Uncontrolled Keywords:	signalling theory, Impact Investing Theory, Green loans, abnormal returns, carbon emission, asset operating efficiency, operating expenses.
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HF Commerce H Social Sciences > HG Finance
Faculty / School / Research Centre / Research Group:	Greenwich Business School Greenwich Business School > Political Economy, Governance, Finance and Accountability (PEGFA) Journal of Economic Literature Classification > Political Economy, Governance, Finance and Accountability (PEGFA) Greenwich Business School > School of Accounting, Finance and Economics
Last Modified:	18 Aug 2025 10:07
URI:	https://gala.gre.ac.uk/id/eprint/50833

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