Is there a relationship between investor sentiment and green finance?

This paper examines the dynamic relationship between green financial market and investor sentiment indices (mainly the Chicago Board Options Exchange’s Volatility Index and the Bitcoin Misery Index) using daily spot prices going from October 13, 2014 to September 11, 2020. By implementing the Vector Error Correction Model, our results highlight a non-significant adjustment towards long-term equilibrium between the feeling of investors in the financial markets and the support of green projects. Our study brings to help investors to boost environmentally friendly portfolios and to adjust their investment strategy based on their sentiments’ indices regarding financial market.