Empirical models based on features ranking techniques for corporate financial distress prediction

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

18 Scopus Citations
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Author(s)

  • Ligang Zhou
  • Kin Keung Lai
  • Jerome Yen

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)2484-2496
Journal / PublicationComputers and Mathematics with Applications
Volume64
Issue number8
Publication statusPublished - Oct 2012

Abstract

Accurate prediction of corporate financial distress is very important for managers, creditors and investors to take correct measures to reduce loss. Many quantitative methods have been employed to develop empirical models for predicting corporate bankruptcy. However, there is so much information disclosed in the companies' financial statements, what information should be selected for building the empirical models with objective to maximize the predictive accuracy. In this study, more than 20 models based on six features ranking strategies are tested on North American companies and Chinese listed companies. The experimental results are helpful to develop financial models by choosing the proper quantitative methods and features selection strategy. © 2012 Elsevier Ltd. All rights reserved.

Research Area(s)

  • Empirical models, Features ranking, Financial distress prediction