o:32657 DOES TRANSPARENCY PAY OFF FOR GREEN BONDS’ ISSUERS? EVIDENCE FROM EU STATE AGENCIES’ GREEN BONDS en A B S T R A C T This paper investigates the impact of transparent allocation of proceeds on green bonds’ yields, providing insights to green bonds’ issuers for optimizing their financing terms. Using data from the EU state agencies’ green bond market, we applied a Prais-Winsten regression model with correlated panels corrected standard errors and common AR(1) to estimate the relationship between green bonds’ yields and various factors, including the transparency of proceeds. Transparent allocation of proceeds has a negative effect on green bonds’ yields, confirming that investors require lower returns when they are well-informed about a bond’s environmental goals. Additionally, higher credit ratings, and shorter remaining maturity are associated with lower green bonds’ yields. Transparent use of proceeds significantly influences green bonds’ yields, demonstrating that specifying the use of bond proceeds for environmentally friendly projects can lead to more favorable financing terms. Future research direction should provide additional classification of the green bonds’ transparency. Keywords: green bonds, transparency, bond yield, EU state agencies, use of proceeds 1552099 10.59267/ekoPolj2304997K 1552101 0352-3462 2024-01-31T13:12:18.854Z 44 no 46 Vlado Kovačević 0000-0002-2902-6496 Irena Janković Univerzitet u Beogradu Ekonomski fakultet person 0000-0003-1115-4702 Vladimir Vasić person 0000-0001-9694-8071 Isidora Lj. Ljumović person 0000-0002-8603-9672 application/pdf 425790 https://phaidrabg.bg.ac.rs/o:32657 no yes 21 70 92000001 11A03 Ekonomika poljoprivrede 70 4 997 1007 2023