Asymmetric and dynamic linkages between green bonds and sustainable agriculture

This study analyses the asymmetric and dynamic connectedness amongst green bonds and sustainable agriculture. To capture the dynamic, time–frequency interactions, the study employs Ensemble Empirical Mode Decomposition (EEMD) and Wavelet Coherence Analysis. The study further applies Quantile Regression to examine asymmetric relationships across market states. The dynamic results show minimal short-term connectedness, but medium- and long-term links are stronger, with green bonds showing positive co-movements with sustainable agriculture. The asymmetric results show that dependence intensifies at the upper and lower quantiles, reflecting stronger spillovers during extreme market conditions. In bullish markets (upper), both markets exhibit synchronized optimism, while in bearish markets (lower), connectedness strengthens due to shared downside risks. In the medium term, green bonds have a greater association with already sustainable agricultural practices, while in the long-term, underperforming sectors benefit more from green bond investments. These findings highlight the nonlinear, market-dependent nature of the green bond-agriculture relationship and underscore the importance of targeted green finance policies. Policymakers and investors can use these insights to design resilient financial mechanisms that align capital flows with sustainable agricultural development.