Uncovering Nonlinear Dynamics Between Green Bonds and the SDGs : Evidence Across All 17 Goals

Abstract

Abstract

ABSTRACT This study examines the nonlinear effects of green bond issuance on the 17 sustainable development goals (SDGs) in countries that pioneered the green bond market during the 2014–2023 period. Existing literature generally evaluates sustainability performance using aggregated SDG indices and linear estimation methods. In contrast, this study analyzes each SDG within separate model frameworks and applies the Method of Moments Quantile Regression (MMQR) approach, which is capable of capturing distribution‐dependent heterogeneous effects. In this way, the study investigates whether green bond financing generates different effects across countries with varying levels of sustainability performance. The empirical findings indicate that green bonds exert their strongest positive influence on agricultural sustainability and food security. In addition, their effects on education and innovation become more pronounced at higher quantiles of sustainability performance. Although negative effects are observed for some social indicators at lower quantiles, these effects decline substantially at higher quantiles, suggesting more balanced and positive long‐run outcomes. The findings highlight the importance for policymakers of designing green bond strategies by considering differences in institutional capacity and sustainability levels across countries.