Journal of Applied
Finance & Research

Abstract

This paper formally estimates the cost of capital impact of green bond issuance among mid cap European manufacturers between 2018 and 2024, controlling for sector, leverage, and ESG disclosure quality. Drawing on a matched sample of issuers and comparable non issuers, we quantify the spread differential attributable to certified green instruments and assess its persistence across credit cycles. Our interest is in establishing whether the documented financing advantage withstands rigorous controls for unobserved firm heterogeneity, and whether it translates into durable improvements in capital structure flexibility for the issuing firms.