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In the green bond market, bond issuers can obtain various types of external reviews to validate their green claims. This paper examines the impact of external reviews in the form of verification, second party opinion (SPO), and green bond rating on the yield spread between a green bond and a paired conventional bond in the secondary green bond market. We perform coarsened exact matching, followed by regression analysis. The results of our analysis show that external reviews are effective signaling tools for issuers in the financial industry, and an SPO most effectively signals the credibility and quality of greenness information.
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Nagihan Simeth (2021) studied this question.
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