Ranking Countries and Geographical Regions in the International Green Bond Transfer Network: A Computational Weighted Ne
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Ranking Countries and Geographical Regions in the International Green Bond Transfer Network: A Computational Weighted Network Approach George Halkos1 · Shunsuke Managi2 · Kyriaki Tsilika1 Accepted: 20 September 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract In this work, we map and measure the interdependencies that exist in green bond markets, relying on yearly proceeds allocation data reported in Tolliver et al. (Environ Res Lett 14:064009, 2019). We focus on transactions from 53 organizations to projects and assets throughout 96 countries from 2006 to 2017 and we build the network of relationships between market participants. Network analysis is a powerful tool to examine the international flows of green bonds and countries’ or regions’ positions in the international green bond transfer network. Such analysis allows for studying the input–output relationship among countries and among regions in a structural way and not in isolation, i.e., taking into account the strong interdependence among all participants. The network is directed and the arrows that represent the edges are oriented from the allocator to the recipient country/region. We employ an established methodology, based on various measures of network centrality, to identify the most significant members which we consider the “backbone” of the market. The influence of countries is measured in terms of their green bonds exports and imports volume and frequency, under the “too-connected-to-fail” and “too-bigto fail” concepts (criteria). A more elegant approach is to redefine systemic importance of financial infrastructures in terms of the importance of their neighbors. The analysis shows a highly influential group of countries, with Germany, Sweden, Luxembourg, the Netherlands, France, the USA, United Kingdom being constantly in the top ten central economies with a leading role in the green bond market. Finally, we study how these graph metrics evolve across the years of the study period. Keywords Green bond market infrastructures · Ranking · Centrality metrics · Network visualization tools * George Halkos [email protected] 1
Laboratory of Operations Research, Department of Economics, University of Thessaly, Volos, Greece
2
Urban Institute, Department of Urban and Environmental Engineering, School of Engineering, Kyushu University, Fukuoka, Japan
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1 Introduction In this study we analyze geographical, structural and instrumental aspects of the green bond market (Agliardi and Agliardi 2019; ICMA 2018; OECD 2017; German Development Institute 2016; Schoenmaker 2017; Tolliver et al. 2020). We adopt a network approach to analyze data on reported financial flows consistent with climate and other sustainability objectives from 20 allocator countries into 96 recipient countries, within an 11-year period (2006–2017). We introduce a source-to-destination country combination to construct a country-to-country green bond transfer network. To investigate the role of regions, we procee
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