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Corporate Financial Risk Assessment and Role of Big Data; New Perspective Using Fuzzy Analytic Hierarchy Process

Author

Listed:
  • Huaiwen ZHANG

    (School of Economics (PhD student), Shanghai University, China. Associate Professor, Anyang University, China)

  • Adnan Khurshid

    (Corresponding Author. School of Economics and Management, Zhejiang Normal University, Jinhua, Zhejiang.)

  • Xinyu WANG

    (School of Economics and Management, North China University of Technology, Beijing, China.)

  • Alina Mirela BĂLTĂŢEANU

    (Bucharest Academy of Economic Studies (PhD student), Bucharest, Romania)

Abstract

Technological progress can help in the systematization of information linked with customer sentiments regarding the enterprise and products. This information can help incorporate decision-making and reduces financial risk. This study puts forward the theory of the impact of big data on corporate financial risk assessment, integrates big data public opinion indicators into the traditional corporate financial risk assessment index. The empirical outcomes are obtained using the Fuzzy Analytic Hierarchy Process. The results show that big data indicators, especially negative sentiment index have a more profound effect on corporate financial risk. In addition, profitability got the highest weightage in our case. A risk assessment model built with big data indicators can effectively correct the original assessment model's shortcomings and improve risk assessment results. Therefore, the financial risk assessment model that incorporates big data indicators shows better performance.

Suggested Citation

  • Huaiwen ZHANG & Adnan Khurshid & Xinyu WANG & Alina Mirela BĂLTĂŢEANU, 2021. "Corporate Financial Risk Assessment and Role of Big Data; New Perspective Using Fuzzy Analytic Hierarchy Process," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 181-199, June.
    • Handle: RePEc:rjr:romjef:v::y:2021:i:2:p:181-199
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    More about this item

    Keywords

    Corporate Financial Risk; Big data; Fuzzy Analytic Hierarchy Process; Public Opinion;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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