1. Development and application of a hybrid forecasting framework based on improved extreme learning machine for enterprise financing risk.
- Author
-
Ma, Zongguo, Wang, Xu, and Hao, Yan
- Subjects
- *
FEATURE selection , *MACHINE learning , *FINANCIAL risk , *FORECASTING , *SMALL business - Abstract
• Introduces a hybrid forecasting framework to identify enterprise financing risk. • Develops a feature selection module to identify the optimal input variables. • Proposes an improved ELM prediction model for enterprise financing risk. • Demonstrates the framework's reliability in forecasting enterprise financing risk. A scientific framework that can effectively forecast enterprise financing risks can both promote enterprise management and reduce the cost of risk for financial institutions. This study constructs a novel hybrid forecasting framework for enterprise financing risk incorporating modules for data preprocessing, feature selection, forecasting, and evaluation. Specifically, the data preprocessing module mainly realizes the prescreen financing risk indicators and solves the forecasting challenge created by imbalanced data; The feature selection module based on binary grey wolf optimization is designed to intelligently identify optimal financing risk indicators; The forecasting module based on the improved extreme learning machine model established in this paper achieves higher forecasting accuracy; and the evaluation module provides reasonable and scientific evaluations of the proposed hybrid forecasting framework by using the data from small and medium-sized enterprises (SMEs) in China and all listed enterprises with Shanghai and Shenzhen A-shares. Using the SMEs dataset as an example, the Type-2 error value of the developed hybrid forecasting framework is 0.1765, which is 70.24% lower than the average result of the other models; the G-mean value of the framework is 0.8566, which is 40.56% higher than the average result of the other models. Based on the results, the proposed hybrid forecasting framework outperforms other comparative models and is a reliable tool for forecasting enterprise financing risk. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF