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Keywords = ℓp Penalty

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19 pages, 2837 KiB  
Article
Credit Risk Assessment of Heavy-Polluting Enterprises: A Wide-p Penalty and Deep Learning Approach
by Wanying Song, Jian Min and Jianbo Yang
Mathematics 2023, 11(16), 3462; https://doi.org/10.3390/math11163462 - 9 Aug 2023
Viewed by 1768
Abstract
Effective credit risk assessment of heavy-polluting enterprises can achieve a balance between environmental and economic benefits. It requires the consideration of risk indicators for both the carbon information dimension and the compliance dimension. However, as the feature dimensions of the model continue to [...] Read more.
Effective credit risk assessment of heavy-polluting enterprises can achieve a balance between environmental and economic benefits. It requires the consideration of risk indicators for both the carbon information dimension and the compliance dimension. However, as the feature dimensions of the model continue to increase, so does the irrelevant feature or noise. Therefore, we investigate the use of non-integers for regularization from high-dimensional data under the conditions of a large number of irrelevant features. In this paper, a novel Wide-p Penalty and Deep Learning (WPDL) method for credit risk assessment is proposed, which could provide a sparse solution. The Wide-p Penalty component allows feature selection using a linear model with an p Penalty regularization mechanism, where 0 < p ≤ 2. The deep component is a DNN that can generalize indicator features from the credit risk data. The experimental results show that the minimum prediction error occurs at a non-integer p Penalty. Furthermore, the WPDL outperforms other models such as KNN, DT, RF, SVM, MLP, DNN, Gradient Boosting, and Bagging. Full article
(This article belongs to the Special Issue Data-Driven Decision Making: Models, Methods and Applications)
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