Prize Dejan Glavas rewarded by AFFI for his PhD research on green bonds

The ESCP Business School PhD graduate won a best paper award for his research establishing a link between expected green regulations and the market’s valuation of green bond issuers.

Dejan Glavas received the best paper award by the AFFI (the French Finance Association) during their 38th international conference for a research paper entitled Green Regulation and Stock Price Reaction to Green Bond Issuance and published in Finance when he was enrolled at ESCP for a PhD in finance focusing on climate and sustainability issues.

A sizeable market

Successfully defended under the supervision of Franck Bancel, his PhD thesis specifically dealt with green bonds, the annual issuance of which he noted “grew sharply from $0.8bn to $155.5bn (CBI, 2018)” between 2007 and 2017 – and has kept growing. “However, to our knowledge, there has been no specific study of the impact of climate-related regulation on the value perception of these financial instruments.”

Changes in regulatory pressure impact the way equity investors react to green bond issuance announcements.

In his paper, Dejan Glavas therefore addressed the question of regulations and their impact on the value perception of a green financial instrument, showing “how changes in regulatory pressure impact the way equity investors react to green bond issuance announcements.”

“We find a positive stock price reaction to green bond issuance announcements compared to that of conventional bond issuance announcements,” he adds. “Based on our analysis, this positive reaction increased in size and statistical significance after the Paris Agreement.”
His results suggest that “investors expected climate-related regulations following such an agreement and, therefore, placed greater value on the ‘green’ flag of the bond issuance.”


Dejan Glavas Dejan Glavas ESCP Business School PhD graduate