Unconventionally greenNo 1453, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area Abstract: We analyse the effects of the Pandemic Emergency Purchase Programme (PEPP) launched by the ECB after the outbreak of the COVID-19 pandemic. The effects of the programme were different from those of the previous asset purchases. The PEPP significantly reduced the yield on bonds that at the same time were eligible for the programme and showed a green label. Via a triple difference estimator, we show that this effect is in addition to the outperformance of green vs non-green bonds that also occurred in the set of non-eligible bonds. All in all, the estimated impact stands at 51 basis points, a value that is also significant from an economic point of view: around 20 per cent of the cost of issuing a bond. From a climate change perspective, this evidence suggests that asset purchase programmes are an effective way of supporting firms financing climate-friendly investments on the bond market. In addition, we find that the issuers that benefited most from the PEPP improved their ESG performance to a larger extent than other issuers. Keywords: corporate quantitative easing; ECB; green bonds; greenium; triple difference estimator (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1453_24 Access Statistics for this paper More papers in Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC. |
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