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Article
ANALYSIS OF THE GREEN STOCK MARKET BUBBLE BASED ON FINANCIAL SATURATION THEORY
Darius Karasa, Stasys Albinas Girdzijauskas
ABSTRACT: The objective of this study is to analyse the financial saturation theory and to develop and apply a green stocks analysis model for bubbles formation based on the aforementioned theory. This paper suggests a methodology that considers both the financial saturation level and the dynamics of accumulated capital growth in the green stocks market. A green bubble analysis model has been developed to estimate the rate of growth of returns on capital. The model reveals that the achieved saturation of the CELS stocks index market capacity is 0.96 (96%) and the return on capital r is 15.25. The high financial saturation of the market and the high growth rate of over 95% (the third level of saturation) suggest that the market is expanding exceptionally rapidly and is exhibiting signs of explosive growth. This indicates that the market has reached the stage of a financial bubble.
KEYWORDS: financial saturation, green bubble, green stock, renewable energy sources.
JEL classification: E32, Q21, O44.