Impact analysis of intra-firm factors on share prices of Chinese construction SMEs based on the XGBoost algorithm

Abstract

At this stage, small and medium-sized construction enterprises (construction SMEs) are in a difficult position due to fierce competition and severe homogenization. However, current studies on China's construction industry are mainly from the macro perspective of regions and policies. There is a lack of studies that can guide business managers to improve enterprises' performance. This paper constructs a 5-dimensional and 18-indicator system of factors influencing the share price of construction SMEs from an intra-firm micro perspective. Based on this, several XGBoost models were trained, and the highest accuracy was selected as the criterion for feature importance ranking using  and RMSE to output the importance ranking of internal factors influencing the share price of Chinese construction SMEs. The results show that the most critical intra-firm factors for the share price of Chinese construction SMEs are the growth capacity of capital, especially the growth ability of shareholders' equity, and the long-term and short-term solvency. This study provides an actionable starting point for Chinese construction SME managers. It uses the XGBoost algorithm, which has higher predictive accuracy than the linear regression commonly used in existing studies, to obtain more reliable factor importance rankings.