National culture and green bond issuance around the world

Abstract

We analyze the impact of Hofstede's culture dimensions on green bond issuance in 84 countries during 1991–2021, using novel International Monetary Fund data. We control for environmental, macroeconomic and institutional factors. Our results show that countries that score higher on individualism, masculinity and indulgence are associated with lower green bond issuance, whilst countries that score high on long-term orientation and uncertainty avoidance are associated with higher green bond issuance. Culture appears to play a role in green bond market development. The culture effect remains broadly robust after applying sensitivity and endogeneity tests, adding new controls and performing coefficient stability and dominance analysis.

Keywords: Green bonds, National culture, Environmental conditions, Institutions, Global