Forecasting Corporate Failure in the Chinese Energy Sector: A Novel Integrated Model of Deep Learning and Support Vector Machine

Wei Xu, Yuchen Pan, Wenting Chen and Hongyong Fu
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Wei Xu: School of Business, Jiangnan University, Wuxi 214122, China
Yuchen Pan: China Research Institute of Enterprise Governed by Law, Southwest University of Political Science and Law, Chongqing 401120, China
Wenting Chen: School of Business, Jiangnan University, Wuxi 214122, China
Hongyong Fu: China Research Institute of Enterprise Governed by Law, Southwest University of Political Science and Law, Chongqing 401120, China

Energies, 2019, vol. 12, issue 12, 1-20

Abstract: Accurate forecasts of corporate failure in the Chinese energy sector are drivers for both operational excellence in the national energy systems and sustainable investment of the energy sector. This paper proposes a novel integrated model (NIM) for corporate failure forecasting in the Chinese energy sector by considering textual data and numerical data simultaneously. Given the feature of textual data and numerical data, convolutional neural network oriented deep learning (CNN-DL) and support vector machine (SVM) are employed as the base classifiers to forecast using textual data and numerical data, respectively. Subsequently, soft set (SS) theory is applied to integrate outputs of CNN-DL and SVM. Hence, NIM inherits advantages and avoids disadvantages of CNN-DL, SVM, and SS. It is able to improve the forecasting performance by taking full use of textual data and numerical data. For verification, NIM is applied to the real data of Chinese listed energy firms. Empirical results indicate that, compared with benchmarks, NIM demonstrates superior performance of corporate failure forecasting in the Chinese energy sector.

Keywords: corporate failure forecasting; energy sector; integrated model; deep learning; support vector machine; soft set (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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