This article presents a novel copula-based no-arbitrage pricing framework for forecasting bond returns and optimizing bond portfolios. Extending the dynamic Nelson-Siegel model with regular vine copulas for term structure dependencies, we generate step-ahead forecasts for zero-coupon bond yields, which we subsequently apply to obtain and simulate the no-arbitrage prices for both callable and non-callable fixed-coupon bonds. These simulated bond prices serve as inputs for a novel convex multiobjective portfolio optimization, incorporating key criteria such as ESG score, average return, Conditional Value-at-Risk (CVaR), distance-to-default, transaction cost, and option-adjusted duration and convexity. Applying our methodology to a dataset of 879 corporate bonds denominated in euros from January 2016 to July 2024, we demonstrate that the suggested copula-based no-arbitrage pricing framework takes advantage of the yield curve non-linear dependence structure and offers bond portfolios that consistently outperform those portfolios based on the classical dynamic Nelson-Siegel approach and an equally weighted (EQW) benchmark in terms of higher returns and Sharpe ratios while effectively reducing tail risk.

The net-zero agreement on carbon emission from Paris 2015 gives a key role to fossil-free energy technologies with an expected multiple growth rate over the coming decades, when successively replacing oil, coal, and gas. In this paper, we examine the EU's comparative advantage in the evolving trade war in clean-energy and show that the EU excels in developing strategic net-zero technologies, but often falls short in manufacturing the final products. The EU's Net-Zero Industry Act aims to encourage investments in the production of strategic energy products and increase self-sufficiency to meet 40% of low-carbon technology needs by 2030. However, this may not fully address long-term challenges relating to growth, job creation, decarbonization, and geopolitical resilience. Supporting innovative producers could be a more effective policy to capitalize on the EU's competitive advantage in the clean- energy sector.

This study explores the effect of frequent green-bond issuance on a firm's financing costs. Using a sample of listed Swedish real estate companies issuing a total of 1074 bonds over the period from 2011 to 2021, difference-in-differences analyses and instrumental variable estimations are applied to identify the causal impact of frequent green-bond vis-& agrave;-vis frequent non-green-bond issuance on a firm's cost of capital and credit rating. The paper argues that repetitive issuance lowers a firm's cost of capital, while the effects of first or one-time green-bond issuance are the opposite. In line with the reputation capital hypothesis, issuing green bonds even lowers the firm's cost of equity capital, while issuing non-green bonds does not affect the cost of equity.

Africa is one of the most vulnerable continents to climate change. Climate and sustainability-linked bonds can provide funding to African governments and corporations for projects that help to mitigate climate change, combat biodiversity loss, and foster sustainable development. However, less than 0.3% of the global environmental, social, governance (ESG) bond issuance volume is devoted to projects in Africa. Based on the entire universe of 107 African ESG bonds from 42 governmental and corporate issuers over the period 2010–2023, this paper establishes that ESG bonds provide benefits to both issuers and investors in terms of lower spreads and volatility. Our econometric results highlight that greenwashing is a valid concern for investors in African ESG bonds and certification of ESG bonds makes a difference vis-à-vis the self-labeling of green bonds. Non-certified ESG bonds do not offer similar benefits compared to certified ones. Green macro-financial policy and suitable regulation to prevent greenwashing can foster African ESG-bond markets.

This article examines the wage earnings of refugee immigrants in Sweden. Using administrative employer-employee data from 1990 onward, approximately 100,000 refugee immigrants who arrived between 1980 and 1996 and were granted asylum are compared to a matched sample of native-born workers. Employing recentered influence function (RIF) quantile regressions to wage earnings for the period 2011-2015, the occupational-task-based Oaxaca-Blinder decomposition approach shows that refugees perform better than natives at the median wage, controlling for individual and firm characteristics. This overperformance is attributable to female refugee immigrants. Given their characteristics, refugee immigrant females perform better than native females across all occupational tasks studied, including non-routine cognitive tasks. A notable similarity of the wage premium exists among various refugee groups, suggesting that cultural differences and the length of time spent in the host country do not have a major impact.

This paper examines the wage earnings of fully-employed refugee immigrants in Sweden. Using administrative employer-employee data from 1990 and onwards, about 100,000 refugee immigrants who arrived between 1980 and 1996 and were granted asylum are compared to a matched sample of native-born workers. Employing recentered influence function (RIF) quantile regressions for the period 2011–2015 to wage earnings, the occupational task-based Oaxaca–Blinder decomposition approach shows that refugees perform better than natives at the median wage, controlling for individual and firm characteristics. This overperformance is due to female refugee immigrants, who have higher wages than comparable native-born female peers up to the 8th decile of the wage distribution. Refugee immigrant females perform better than native females across all occupational tasks studied, including non-routine cognitive tasks. A remarkable similarity exists in the relative wage distributions among various refugee groups, suggesting that cultural differences and the length of time spent in the host country do not significantly affect their labor market performance.

This special issue of the Eurasian Economic Review delves into the critical relationships between macro-financial policy frameworks and environmental sustainability, emphasizing the urgent challenges posed by climate change, biodiversity loss, and environmental degradation. These environmental crises pose significant threats to global economic and financial stability, underscoring the necessity of integrating environmental considerations into macro-financial policies to foster sustainability and resilience in economic policymaking. Through a collection of research papers, this issue explores innovative strategies for developing comprehensive policy frameworks that harmonize monetary, financial, and fiscal policies with environmental objectives. It emphasizes the need for advanced methods to assess and manage the financial risks of climate change and environmental degradation. Underscoring the need for a multidisciplinary approach, the research advocates for the collaboration of economists, environmental scientists, policymakers, and stakeholders to develop effective macro-financial policies. These policies aim to mitigate environmental risks, enhance environmental sustainability, and preserve biodiversity. The issue calls for further research to refine models that accurately predict the macro-financial impacts of environmental risks and assess the effectiveness of policy measures, paving the way for a sustainable future in the face of escalating environmental challenges.

This article extends the socially responsible multiobjective problem to (i) estimating optimal portfolios via reward/risk maximization, (ii) including dependence structure between asset returns using vine copulas, and (iii) incorporating enhanced indexation utilizing cumulative zero-order stochastic dominance (CZϵSD). Applying the multiobjective optimal portfolio (MOOP) approach to a sample of EuroStoxx 50 constituents, the results show that the MOOPs provide investors with the flexibility to incorporate different objectives while investing in optimal portfolios. Including social responsibility results in lower portfolio return and economic performance, but at the same time portfolio risk, expected shortfall of portfolio returns below the benchmark, and turnover are reduced. The copula-based predictive models lead to MOOPs with higher returns and reward/risk ratios. Moreover, optimizing environmental scores leads to less risky MOOPs, while optimizing social scores results in higher average return and better risk-adjusted performance.

This study investigates whether public procurement mitigates or exacerbates innovative enterprises’ financial constraints. We distinguish between general and environmentally beneficial innovative enterprises. Theory suggests that the treatment effects of public procurement, particularly when mediated by the demand-pull effect, may lower a company’s funding constraints for innovation. We test this theory with extended probit models allowing for endogenous treatment and selection. The findings reveal a significantly positive treatment effect of public procurement on the probability of facing financial constraints in both areas: general and environmentally beneficial innovative activities. Thus, the principal implications of this study are (1) that being an innovating SME exacerbates financial constraints and (2) that strengthening SMEs’ participation in European public tenders would not contribute to lowering SMEs’ financial constraints. On the contrary, complementary grants or other financial incentives might be necessary to substantially increase the SMEs’ bidding rates in public tenders.