Influencing factors and prediction of overcapacity of new energy enterprises in China

Abstract

PurposeThis study aims to clarify influencing factors of overcapacity of new energy enterprises in China and accurately predict whether these enterprises have overcapacity.Design/methodology/approachBased on relevant data including the experience and evidence from the capital market in China, the research establishes a generic univariate selection-comparative machine learning model to study relevant factors that affect overcapacity of new energy enterprises from five dimensions. These include the governmental intervention, market demand, corporate finance, corporate governance and corporate decision. Moreover, the bridging approach is used to strengthen findings from quantitative studies via the results from qualitative studies.FindingsThe authors' results show that the overcapacity of new energy enterprises in China is brought out by the combined effect of governmental intervention corporate governance and corporate decision. Governmental interventions increase the overcapacity risk of new energy enterprises mainly by distorting investment behaviors of enterprises. Corporate decision and corporate governance factors affect the overcapacity mainly by regulating the degree of overconfidence of the management team and the agency cost. Among the eight comparable integrated models, generic univariate selection-bagging exhibits the optimal comprehensive generalization performance and its area under the receiver operating characteristic curve Area under curve (AUC) accuracy precision and recall are 0.719, 0.960, 0.975 and 0.983, respectively.Originality/valueThe proposed integrated model analyzes causes and predicts presence of overcapacity of new energy enterprises to help governments to formulate appropriate strategies to deal with overcapacity and new energy enterprises to optimize resource allocation. Ten main features which affect the overcapacity of new energy enterprises in China are identified through generic univariate selection model. Through the bridging approach, the impact of the main features on the overcapacity of new energy enterprises and the mechanism of the influence are analyzed.