Exploring the cultural forces behind green bond issuance

Luu Hanh Nguyen1,, Doan Anh Dung1, Phan Nhat Minh1, Doan Thi Thuy Quynh1, Pham Thi Thanh Ngan1
1 University of Economics and Business, Vietnam National University, Hanoi, Vietnam

Main Article Content


Green bonds, a rapidly emerging financial instrument designed to bolster environmentally sustainable initiatives, are subject to the influence of the national culture on economic decisions. This study examines how cultural dimensions affect varying levels of green bond issuance based on Hofstede’s theory. Fixed-effects regression was employed to analyze a sample of 67 countries from 2008 to 2021. The results suggest that cultural dimensions such as individualism and long-term orientation promote green bond issuance, while masculinity restrains it. Additionally, this study examines the moderating effects of institutional quality and economic conditions. The findings show that the relationship between national culture and green bonds is more significant in countries with higher institutional quality and lower income levels. This paper contributes to the literature by providing further insights into the interplay between cultural values, economic development, and institutional quality, thus enhancing our understanding of the multifaceted factors influencing green bond issuance. While this study offers valuable implications for policymakers, investors, and issuers seeking to promote sustainable finance in different cultural contexts, it could be enhanced by conducting more focused analyses within specific groups of countries and distinct organizations issuing green bonds, as well as by exploring the potential mechanisms underlying the observed relationships between cultural values and green bond issuance.

Article Details


Allam, A., Moussa, T., Abdelhady, M. and Yamen, A. (2023), “National culture and tax evasion: the role of the institutional environment quality”, Journal of International Accounting, Auditing and Taxation, Vol. 52, 100559.
Anh Tu, C. and Rasoulinezhad, E. (2022), “Energy efficiency financing and the role of green bond: policies for post-Covid period”, China Finance Review International, Vol. 12 No. 2, pp. 203 - 218.
Bae, S.C., Chang, K. and Kang, E. (2012), “Culture, corporate governance, and dividend policy: international evidence”, Journal of Financial Research, Vol. 35 No. 2, pp. 289 - 316.
Barua, S. and Chiesa, M. (2019), “Sustainable financing practices through green bonds: what affects the funding size?”, Business Strategy and the Environment, Vol. 28 No. 6, pp. 1131 - 1147.
Changa, K. and Noorbakhshb, A. (2009), “Does national culture affect international corporate cash holdings?”, Journal of Multinational Financial Management, Vol. 19 No. 5, pp. 323 - 342.
Cho, Y.N., Thyroff, A., Rapert, M.I., Park, S.Y. and Lee, H.J. (2013), “To be or not to be green: exploring individualism and collectivism as antecedents of environmental behavior”, Journal of Business Research, Vol. 66 No. 8, pp. 1052 - 1059.
Dan, A. and Tiron-Tudor, A. (2021), “The determinants of green bond issuance in the European Union”, Journal of Risk and Financial Management, Vol. 14 No. 9, 446.
Disli, M., Ng, A. and Askari, H. (2016), “Culture, income, and CO2 emission”, Renewable and Sustainable Energy Reviews, Vol. 62, pp. 418 - 428.
Farooq, U., Ahmed, J., Ashfaq, K., Hassan Khan, G.U. and Khan, S. (2020), “National culture and firm financial performance: a mediating role of firm financing decision”, Cogent Business & Management, Vol. 7 No. 1, 1858640.
Fatica, S. and Panzica, R. (2021), “Green bonds as a tool against climate change?”, Business Strategy and the Environment, Vol. 30 No. 5, pp. 2688 - 2701.
Fernando, S. and Lawrence, S. (2014), “A theoretical framework for CSR practices: integrating legitimacy theory, stakeholder theory and institutional theory”, Journal of Theoretical Accounting Research, Vol. 10 No. 1, pp. 149 - 178.
Frijns, B., Hubers, F., Kim, D., Roh, T.Y. and Xu, Y. (2022), “National culture and corporate risktaking around the world”, Global Finance Journal, Vol. 52, 100710.
Gallen, M.L. and Peraita, C. (2017), “The effects of national culture on corporate social responsibility disclosure: a cross-country comparison”, Applied Economics, Vol. 49 No. 28, pp. 2765 - 2777.
Gray, S.J. (1988), “Towards a theory of cultural influence on the development of accounting systems internationally”, Abacus, Vol. 24 No. 1, pp. 1 - 15.
Halkos, G. and Skouloudis, A. (2017), “Revisiting the relationship between corporate social responsibility and national culture: a quantitative assessment”, Management Decision, Vol. 55 No. 3, pp. 595 - 613.
Harrison, C., MacGeoch, M. and Michetti, C. (2022), Sustainable debt global state of the market 2021, Climate Bonds Initiative, United Kingdom.
Hofstede, G. (1997), Cultures and organisations. Software of the mind, McGraw-Hill, New York.
Huang, L., Cao, Y. and Zhu, Y. (2022), “Is there any recovery power for economic growth from green finance? Evidence from OECD member countries”, Economic Change and Restructuring, Vol. 56, pp. 3909 - 3926.
Kaufmann, D., Kraay, A. and Mastruzzi, M. (2009), “Governance matters VIII: aggregate and individual governance indicators, 1996-2008”, World Bank Policy Research Working Paper 4978, World Bank, Washington D.C.
Klapper, L. and Lusardi, A. (2020), “Financial literacy and financial resilience: evidence from around the world”, Financial Management, Vol. 49 No. 3, pp. 589 - 614.
Li, K., Griffin, D., Yue, H. and Zhao, L. (2013), “How does culture influence corporate risk-taking?”, Journal of Corporate Finance, Vol. 23, pp. 1 - 22.
Luu, H.N., Do, D.D., Pham, T., Ho, V.X. and Dinh, Q.A. (2023), “Cultural values and the adoption of central bank digital currency”, Applied Economics Letters, Vol. 30 No. 15, pp. 2024 - 2029.
Nguyen, N.M., Luu, N.H., Hoang, A. and Nguyen, M.T.N. (2023), “Environmental impacts of green bonds in cross-countries analysis: a moderating effect of institutional quality”, Journal of Financial Economic Policy, Vol. 15 No. 4/5, pp. 313 - 336.
Peng, Y.S., Dashdeleg, A.U. and Chih, H.L. (2012), “Does national culture influence firm's CSR engagement: a cross country study”, International Proceedings of Economics Development and Research, Vol. 58, pp. 40 - 44.
Pradhan, A.K. and Nibedita, B. (2021), “The determinants of corporate social responsibility: evidence from Indian firms”, Global Business Review, Vol. 22 No. 3, pp. 753 - 766.
Ringov, D. and Zollo, M. (2007), “Corporate responsibility from a socio-institutional perspective: the impact of national culture on corporate social performance”, Corporate Governance, Vol. 7 No. 4, pp. 476 - 485.
Semykina, A. and Wooldridge, J.M. (2010), “Estimating panel data models in the presence of endogeneity and selection”, Journal of Econometrics, Vol. 157 No. 2, pp. 375 - 380.
Shao, L., Kwok, C.C. and Guedhami, O. (2010), “National culture and dividend policy”, Journal of International Business Studies, Vol. 41, pp. 1391 - 1414.
Song, C.Q., Chang, C.P. and Gong, Q. (2021), “Economic growth, corruption, and financial development: global evidence”, Economic Modelling, Vol. 94, pp. 822 - 830.
Stock, J.H. and Watson, M.W. (2008), “Heteroskedasticity‐robust standard errors for fixed effects panel data regression”, Econometrica, Vol. 76 No. 1, pp. 155 - 174.
Svensson, G., Wood, G., Singh, J., Carasco, E. and Callaghan, M. (2009), “Ethical structures and processes of corporations operating in Australia, Canada, and Sweden: a longitudinal and cross-cultural study”, Journal of Business Ethics, Vol. 86, pp. 485 - 506.
Tang, D.Y. and Zhang, Y. (2020), “Do shareholders benefit from green bonds?”, Journal of Corporate Finance, Vol. 61, 101427.
Thanetsunthorn, N. (2015), “The impact of national culture on corporate social responsibility: evidence from cross-regional comparison”, Asian Journal of Business Ethics, Vol. 4, pp. 35 - 56.
Tolliver, C., Keeley, A.R. and Managi, S. (2020), “Drivers of green bond market growth: the importance of nationally determined contributions to the Paris Agreement and implications for sustainability”, Journal of Cleaner Production, Vol. 244, 118643.
Vachon, S. (2010), “International operations and sustainable development: should national culture matter?”, Sustainable Development, Vol. 18 No. 6, pp. 350 - 361.
Weber, Y., Tarba, S.Y. and Reichel, A. (2011), “A model of the influence of culture on integration approaches and international mergers and acquisitions performance”, International Studies of Management and Organization, Vol. 41 No. 3, pp. 9 - 24.
Williams, S.M. (1999), “Voluntary environmental and social accounting disclosure practices in the Asia-Pacific region: an international empirical test of political economy theory”, The International Journal of Accounting, Vol. 34 No. 2, pp. 209 - 238.
Yamen, A., Kuzey, C. and Dinc, M.S. (2022), “Culture, institutional quality and earnings management: international evidence”, EuroMed Journal of Business, Vol. 17 No. 1, pp. 72 - 87.
Zucker, L.G. (1987), “Institutional theories of organization”, Annual Review of Sociology, Vol. 13 No. 1, pp. 443 - 464.