Green Bond Market Development and Circularity in the EU-27: Material Use and Resource Productivity

This study examines whether the annual green-bond share of relevant corporate and government bond issuance is associated with circular material use and resource productivity in the EU-27. The accounting problem is the traceability gap between labelled issuance, allocated expenditure, and realised material outcomes. A balanced 2014–2024 panel contains 297 country-year observations. Two-way fixed-effects models with six controls use 270, 243, and 216 observations for contemporaneous, one-year-lagged and two-year-lagged specifications, respectively. Inference uses country-clustered standard errors and restricted wild cluster bootstrap-t tests with 9999 repetitions, with Driscoll–Kraay sensitivity estimates. None of the six baseline specifications, 18 additional robustness specifications, or 54 leave-one-country-out re-estimations has a wild-bootstrap p-value below 0.10. Circular material use coefficients are negative but imprecise; resource-productivity coefficients change sign. Neither directional hypothesis is supported. These conditional associations do not identify causal circular finance additionality, instrument ineffectiveness, or reporting failures. Incomplete allocation traceability, issuer composition, and implementation delays are possible mechanisms requiring disaggregated evidence. This study distinguishes issuance penetration from market size and links its findings to the need for comparable allocation reporting and verifiable circular outcomes.