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Article

Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model

School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610000, China
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Academic Editor: Helen Chiappini
Sustainability 2021, 13(10), 5368; https://doi.org/10.3390/su13105368
Received: 1 March 2021 / Revised: 2 May 2021 / Accepted: 4 May 2021 / Published: 11 May 2021
(This article belongs to the Collection Sustainability in Financial Industry)
Issuance effects are regarded as one of the most important aspects referring to the regulatory guidelines of green corporate bond ratings. This paper developed a new incentive difference Hotelling model, considering four major factors, i.e., the direct effect of issuance, the indirect effect of issuance, the reputation of rating agencies and the regulatory penalties. In this model, how the direct effect and the indirect effect impact the dual rating mechanism and the integrated rating mechanism was discussed. Numerical experiments were conducted to explore the regulatory effects on the two defined mechanisms in different situations. The results demonstrate that under each mechanism, the direct and indirect effects of issuance indirectly improve the effectiveness and efficiency of regulation by increasing the environmental benefit information content in the rating information, and the indirect effect has a greater impact. Moreover, it provides specific recommendations for the design of a regulatory regime. View Full-Text
Keywords: green corporate bond; direct issuance effect; indirect issuance effect; Hotelling model; rating mechanisms green corporate bond; direct issuance effect; indirect issuance effect; Hotelling model; rating mechanisms
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MDPI and ACS Style

Zhao, H.; Tian, Y.; Zhou, X.; Zhang, L.; Meng, W. Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model. Sustainability 2021, 13, 5368. https://doi.org/10.3390/su13105368

AMA Style

Zhao H, Tian Y, Zhou X, Zhang L, Meng W. Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model. Sustainability. 2021; 13(10):5368. https://doi.org/10.3390/su13105368

Chicago/Turabian Style

Zhao, Hanyi, Yixiang Tian, Xiangyun Zhou, Luping Zhang, and Wei Meng. 2021. "Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model" Sustainability 13, no. 10: 5368. https://doi.org/10.3390/su13105368

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