Is there a green bubble developing on the Oslo Stock Exchange? Testing for explosive behaviour in green stocks

Green investment has never been as relevant as it is today. 2020 and 2021 were recordbreaking years for new listings of green companies on the Oslo Stock Exchange and Euronext Growth. The stock prices of green companies have skyrocketed in recent years, although many of the companies do not deliver positive cash flows. Politicians and market participants are focusing on the green transition, while the media is wondering if it is a green bubble. This master's thesis investigates whether there is a green bubble developing on the Oslo Stock Exchange. The OSEBX index is used as a representation of the Oslo Stock Exchange, and the green stocks are retrieved from the Oslo Stock Exchange and Euronext Growth. The methodology used in this thesis is based on several recursive Augmented Dickey-Fuller (ADF) tests. The results from the ADF tests indicate that there is not a bubble in the Norwegian stock market, although several of the ADF tests showed explosive behaviour in some of the green stocks. Furthermore, the thesis addresses macroeconomic factors, and consider market trends.