Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)

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The Impact of Investor Sentiment over Green Finance on Stock Market Activity: Based on the VAR Model

Authors
Ye Li1, *
1School of Insurance and Economics, University of International Business and Economics, Beijing, 100020, The People’s Republic of China
*Corresponding author. Email: 202202044@uibe.edu.cn
Corresponding Author
Ye Li
Available Online 3 July 2025.
DOI
10.2991/978-94-6463-748-9_43How to use a DOI?
Keywords
Green Finance; Investor Sentiment; Stock Market; VAR Model
Abstract

This study examines the impact of investor sentiment toward green finance on stock market activity. The research addresses the gap in understanding the dynamic relationship between green bond market activity and stock market performance, which is increasingly important as green finance continues to grow and influence sustainable investment practices. A VAR model was constructed after confirming stationarity with ADF tests and determining an optimal lag length of four. The Granger causality test demonstrated that green bond trading volume has predictive power for stock market trading volume, while impulse response analysis revealed a positive short-term impact of green bond market activity on stock trading volume that diminishes over time. The results highlight the role of investor preferences for green finance in driving short-term stock market activity but suggest that this influence fades as markets stabilize. The findings provide valuable insights for policymakers, investors, and regulatory bodies to better understand the intersection of green finance and market dynamics, ultimately promoting sustainable financial market development.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
3 July 2025
ISBN
978-94-6463-748-9
ISSN
2352-5428
DOI
10.2991/978-94-6463-748-9_43How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Ye Li
PY  - 2025
DA  - 2025/07/03
TI  - The Impact of Investor Sentiment over Green Finance on Stock Market Activity: Based on the VAR Model
BT  - Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)
PB  - Atlantis Press
SP  - 387
EP  - 398
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-748-9_43
DO  - 10.2991/978-94-6463-748-9_43
ID  - Li2025
ER  -