Understanding the preference of individual retail investors on green bond in India: An empirical study

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The biggest challenge facing countries, including India, is creating and managing an LCR (low carbon resilient) economy, which balances the need for high growth rates and is environmentally sustainable. The green bond market provides investors the means to help change the economy into an LCR economy. The study was undertaken to understand the key drivers and the factors influencing the individual retail investor’s decision to invest in green bonds. A survey instrument was designed and administered through the snowball sampling technique to 125 Indian respondents of various age groups who were eligible to invest in the Indian bond market. SPSS software was used to conduct a descriptive analysis followed by regression and conjoint analyses. The study results suggest that the Environmental, Social, and Governance (ESG) rating and credit rating of the green bond issuers are the key factors that influence an individual’s investment decision. The findings also highlight that incentives such as tax exemptions and awareness of green bonds also affect an investor’s decision. This research stands out as one of the first attempts to understand the Indian retail investors’ perception of a green bond.

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    • Table 1. Attributes and attributes level
    • Table 2. Descriptive statistics of the research sample
    • Table 3. Regression model summary
    • Table 4. Output of regression analysis
    • Table 5. Multinomial logistic regression output
    • Table 6. Dummy variables
    • Table 7. Output of the conjoint analysis
    • Conceptualization
      Dhaval Prajapati, Dipen Paul, Sushant Malik, Dharmesh K. Mishra
    • Data curation
      Dhaval Prajapati, Dipen Paul, Sushant Malik, Dharmesh K. Mishra
    • Formal Analysis
      Dhaval Prajapati, Dipen Paul, Sushant Malik
    • Investigation
      Dhaval Prajapati, Sushant Malik, Dharmesh K. Mishra
    • Methodology
      Dhaval Prajapati, Dipen Paul, Sushant Malik, Dharmesh K. Mishra
    • Validation
      Dhaval Prajapati, Dipen Paul, Sushant Malik
    • Writing – original draft
      Dhaval Prajapati, Dipen Paul, Sushant Malik, Dharmesh K. Mishra
    • Project administration
      Dipen Paul
    • Supervision
      Dipen Paul
    • Writing – review & editing
      Dharmesh K. Mishra