Financial Network Analysis on the Performance of Companies Using Integrated Entropy–DEMATEL–TOPSIS Model

In this paper, we propose a multi-criteria decision making (MCDM) model by integrating the entropy–DEMATEL with TOPSIS model to analyze the causal relationship of financial ratios towards the financial performance of the companies. The proposed model is illustrated using the financial data of the companies of Dow Jones Industrial Average (DJIA). The financial network analysis using entropy–DEMATEL shows that the financial ratios such as debt to equity ratio (DER) and return on equity (ROE) are classified into the cause criteria group, whereas current ratio (CR), earnings per share (EPS), return on asset (ROA) and debt to assets ratio (DAR) are categorized into the effect criteria group. The top three most influential financial ratios are ROE, CR and DER. The significance of this paper is to determine the causal relationship of financial network towards the financial performance of the companies with the proposed entropy–DEMATEL–TOPSIS model. The ranking identification of the companies in this study is beneficial to the investors to select the companies with good performance in portfolio investment. The proposed model has been applied and validated in the portfolio investment using a mean-variance model based on the selection of companies with good performance. The results show that the proposed model is able to generate higher mean return than the benchmark DJIA index at minimum risk. However, short sale is not allowed for the applicability of the proposed model in portfolio investment.     

Shapley-Based Estimation of Company Value—Concept,Algorithms and Parameters

The aim of the article is to propose a new method of valuation of a company, considering its ownership relations with other companies. For this purpose, the concept of the Shapley value from cooperative game theory is used as the basis for assessing such dependent companies. The paper presents proposals for Shapley value calculation algorithms for our model. We expand our model by discussing personal relations in addition to ownership relations and point out how intuitionistic fuzzy sets may be helpful in this context. As a result, we propose two new expanded models. In the first probabilistic model, we apply Pearson’s correlation coefficient, in the second, we use a correlation coefficient between intuitionistic fuzzy sets to determine the personal relationships. Finally, we present and interpret results for a real-world economic network with 17 companies.     

An Extended FMEA Model Based on Cumulative Prospect Theory and Type-2 Intuitionistic Fuzzy VIKOR for the Railway Train Risk Prioritization

This paper aims toward the improvement of the limitations of traditional failure mode and effect analysis (FMEA) and examines the crucial failure modes and components for railway train operation. In order to overcome the drawbacks of current FMEA, this paper proposes a novel risk prioritization method based on cumulative prospect theory and type-2 intuitionistic fuzzy VIKOR approach. Type-2 intuitionistic VIKOR handles the combination of the risk factors with their entropy weight. Triangular fuzzy number intuitionistic fuzzy numbers (TFNIFNs) applied as type-2 intuitionistic fuzzy numbers (Type-2 IFNs) are adopted to depict the uncertainty in the risk analysis. Then, cumulative prospect theory is employed to deal with the FMEA team member’s risk sensitiveness and decision-making psychological behavior. Finally, a numerical example of the railway train bogie system is selected to illustrate the application and feasibility of the proposed extended FMEA model in this paper, and a comparison study is also performed to validate the practicability and effectiveness of the novel FMEA model. On this basis, this study can provide guidance for the risk prioritization of railway trains and indicate a direction for further research of risk management of rail traffic.     

A Hybrid Multi-Criteria Decision-Making Approach Based on ANP-Entropy TOPSIS for Building Materials Supplier Selection

This article will tell you how to combine “entropy” in the model to reduce the bias of multi-criteria evaluation. Subjective weights are usually determined by decision makers based on their professional background, experience and knowledge, and other factors. The objective weight is obtained by constructing an evaluation matrix of the information based on the actual information of the evaluation criteria of the scheme, and obtained through multi-step calculations. Different decision-making methods are based on different weight types. Considering only one of the two weights often leads to biased results. In addition, in order to establish an effective supply chain, buyers must find suitable merchants among suppliers that provide quality products and/or services. Based on the above factors, it is difficult to choose a suitable alternative. The main contribution of this paper is to combine analytic network process (ANP), entropy weight and the technique for order preference by similarity to an ideal solution (TOPSIS) to construct a suitable multi-criteria decision (MCDM) model. By means of ANP-entropy weights to extend the TOPSIS method, ANP-entropy weights are used to replace subjective weights. A supplier selection decision-making model based on ANP-entropy TOPSIS is proposed. At last, the sensitivity analysis shows that, taking the selection of building materials suppliers as an example, the hybrid ANP-entropy TOPSIS method can effectively select suitable suppliers.     

Comparative Analysis of Different Univariate Forecasting Methods in Modelling and Predicting the Romanian Unemployment Rate for the Period 2021–2022

Unemployment has risen as the economy has shrunk. The coronavirus crisis has affected many sectors in Romania, some companies diminishing or even ceasing their activity. Making forecasts of the unemployment rate has a fundamental impact and importance on future social policy strategies. The aim of the paper is to comparatively analyze the forecast performances of different univariate time series methods with the purpose of providing future predictions of unemployment rate. In order to do that, several forecasting models (seasonal model autoregressive integrated moving average (SARIMA), self-exciting threshold autoregressive (SETAR), Holt–Winters, ETS (error, trend, seasonal), and NNAR (neural network autoregression)) have been applied, and their forecast performances have been evaluated on both the in-sample data covering the period January 2000–December 2017 used for the model identification and estimation and the out-of-sample data covering the last three years, 2018–2020. The forecast of unemployment rate relies on the next two years, 2021–2022. Based on the in-sample forecast assessment of different methods, the forecast measures root mean squared error (RMSE), mean absolute error (MAE), and mean absolute percent error (MAPE) suggested that the multiplicative Holt–Winters model outperforms the other models. For the out-of-sample forecasting performance of models, RMSE and MAE values revealed that the NNAR model has better forecasting performance, while according to MAPE, the SARIMA model registers higher forecast accuracy. The empirical results of the Diebold–Mariano test at one forecast horizon for out-of-sample methods revealed differences in the forecasting performance between SARIMA and NNAR, of which the best model of modeling and forecasting unemployment rate was considered to be the NNAR model.     

The Role of Information in Managing Interactions from a Multifractal Perspective

In the framework of the multifractal hydrodynamic model, the correlations informational entropy–cross-entropy manages attractive and repulsive interactions through a multifractal specific potential. The classical dynamics associated with them imply Hubble-type effects, Galilei-type effects, and dependences of interaction constants with multifractal degrees at various scale resolutions, while the insertion of the relativistic amendments in the same dynamics imply multifractal transformations of a generalized Lorentz-type, multifractal metrics invariant to these transformations, and an estimation of the dimension of the multifractal Universe. In such a context, some correspondences with standard cosmologies are analyzed. Since the same types of interactions can also be obtained as harmonics mapping between the usual space and the hyperbolic plane, two measures with uniform and non-uniform temporal flows become functional, temporal measures analogous with Milne’s temporal measures in a more general manner. This work furthers the analysis published recently by our group in “Towards Interactions through Information in a Multifractal Paradigm”.     

Efficient Markets and Contingent Claims Valuation: An Information Theoretic Approach

This research article shows how the pricing of derivative securities can be seen from the context of stochastic optimal control theory and information theory. The financial market is seen as an information processing system, which optimizes an information functional. An optimization problem is constructed, for which the linearized Hamilton–Jacobi–Bellman equation is the Black–Scholes pricing equation for financial derivatives. The model suggests that one can define a reasonable Hamiltonian for the financial market, which results in an optimal transport equation for the market drift. It is shown that in such a framework, which supports Black–Scholes pricing, the market drift obeys a backwards Burgers equation and that the market reaches a thermodynamical equilibrium, which minimizes the free energy and maximizes entropy.     

On a 2-Relative Entropy

We construct a 2-categorical extension of the relative entropy functor of Baez and Fritz, and show that our construction is functorial with respect to vertical morphisms. Moreover, we show such a ‘2-relative entropy’ satisfies natural 2-categorial analogues of convex linearity, vanishing under optimal hypotheses, and lower semicontinuity. While relative entropy is a relative measure of information between probability distributions, we view our construction as a relative measure of information between channels.     

Measuring and Modeling the U.S. Regulatory Ecosystem

Over the last 23 years, the U.S. Securities and Exchange Commission has required over 34,000 companies to file over 165,000 annual reports. These reports, the so-called “Form 10-Ks,” contain a characterization of a company’s financial performance and its risks, including the regulatory environment in which a company operates. In this paper, we analyze over 4.5 million references to U.S. Federal Acts and Agencies contained within these reports to measure the regulatory ecosystem, in which companies are organisms inhabiting a regulatory environment. While individuals across the political, economic, and academic world frequently refer to trends in this regulatory ecosystem, far less attention has been paid to supporting such claims with large-scale, longitudinal data. In this paper, in addition to positing a model of regulatory ecosystems, we document an increase in the regulatory energy per filing, i.e., a warming “temperature.” We also find that the diversity of the regulatory ecosystem has been increasing over the past two decades. These findings support the claim that regulatory activity and complexity are increasing, and this framework contributes an important step towards improving academic and policy discussions around legal complexity and regulation.     

Financial Fraud Detection and Prediction in Listed Companies Using SMOTE and Machine Learning Algorithms

This paper proposes a new method that can identify and predict financial fraud among listed companies based on machine learning. We collected 18,060 transactions and 363 indicators of finance, including 362 financial variables and a class variable. Then, we eliminated 9 indicators which were not related to financial fraud and processed the missing values. After that, we extracted 13 indicators from 353 indicators which have a big impact on financial fraud based on multiple feature selection models and the frequency of occurrence of features in all algorithms. Then, we established five single classification models and three ensemble models for the prediction of financial fraud records of listed companies, including LR, RF, XGBOOST, SVM, and DT and ensemble models with a voting classifier. Finally, we chose the optimal single model from five machine learning algorithms and the best ensemble model among all hybrid models. In choosing the model parameter, optimal parameters were selected by using the grid search method and comparing several evaluation metrics of models. The results determined the accuracy of the optimal single model to be in a range from 97% to 99%, and that of the ensemble models as higher than 99%. This shows that the optimal ensemble model performs well and can efficiently predict and detect fraudulent activity of companies. Thus, a hybrid model which combines a logistic regression model with an XGBOOST model is the best among all models. In the future, it will not only be able to predict fraudulent behavior in company management but also reduce the burden of doing so.     

Cross-Subject Emotion Recognition Using Fused Entropy Features of EEG

Emotion recognition based on electroencephalography (EEG) has attracted high interest in fields such as health care, user experience evaluation, and human–computer interaction (HCI), as it plays an important role in human daily life. Although various approaches have been proposed to detect emotion states in previous studies, there is still a need to further study the dynamic changes of EEG in different emotions to detect emotion states accurately. Entropy-based features have been proved to be effective in mining the complexity information in EEG in many areas. However, different entropy features vary in revealing the implicit information of EEG. To improve system reliability, in this paper, we propose a framework for EEG-based cross-subject emotion recognition using fused entropy features and a Bidirectional Long Short-term Memory (BiLSTM) network. Features including approximate entropy (AE), fuzzy entropy (FE), Rényi entropy (RE), differential entropy (DE), and multi-scale entropy (MSE) are first calculated to study dynamic emotional information. Then, we train a BiLSTM classifier with the inputs of entropy features to identify different emotions. Our results show that MSE of EEG is more efficient than other single-entropy features in recognizing emotions. The performance of BiLSTM is further improved with an accuracy of 70.05% using fused entropy features compared with that of single-type feature.     

Fractional-Order Active Disturbance Rejection Control with Fuzzy Self-Tuning for Precision Stabilized Platform

In this paper, a novel fractional-order active disturbance rejection control with fuzzy self-tuning method (FSFOADRC) is proposed for photoelectric tracking system (PTS). Firstly, aiming at the internal uncertainty of PTS and external disturbance, a fraction-order extended state observer (FOESO) is designed, and the FOESO can transform the plant into a simple form, which greatly simplifies the mathematical model. Secondly, a fuzzy regulator is applied to the proportion–differentiation controller (PD), increasing the flexibility and adaptivity of the controller. In addition, the stability of the whole control system can be guaranteed. Eventually, numerical comparative simulations are implemented to verify the feasibility and superiority of the proposed method. Compared with the integral-order active disturbance rejection control (IOADRC), fractional-order active disturbance rejection control (FOADRC) without the fuzzy regulator and proportion–integration–differentiation (PID) controller, the proposed method performs better with faster response, smaller overshoot, and stronger disturbance suppression capability.     

A Geometric-Based LSGDM Method for Tourism Project Decision Optimization with Trust–Distrust Relationships

In this paper, we discuss the decision optimization of tourism projects in Hebei Province, China. To improve the process of analyzing tourism projects, we introduce a model that includes multiple decision makers as subjects based on a standard four-dimensional evaluation system. In order to improve the effectiveness of decision-making results, we will increase the number of decision makers to 40. A novel large-scale group decision-making (LSGDM) algorithm that incorporates the trust–distrust asymmetric relationships between decision makers is proposed. This model contains three main innovations: firstly, in the evaluation of decision makers’ social network relations, the trust–distrust value is introduced as a new carrier, and a weighted directed network and data integration operator are constructed based on the evaluation between decision makers; secondly, an extended Girvan-Newman (GN) algorithm is constructed to cluster the decision makers from this weighted network; thirdly, the interval-valued intuitionistic fuzzy number (IVIFN) is used to evaluate the alternatives, studying the IVIFN’s geometric significance by placing in a rectangular coordinate system. Finally, a new LSGDM model is proposed. Using the development of a cultural tourism project in a township as an example, the effectiveness of the proposed model is illustrated. By comparing the results of our method to those of a LSGDM algorithm that does not incorporate trust relationships, we assess the performance of the new model.     

Nanotechnology,voluntary oversight,and corporate social performance: does company size matter?

In this article, we examine voluntary oversight programs for nanotechnology in the context of corporate social performance (CSP) in order to better understand the drivers, barriers, and forms of company participation in such programs. At the theoretical level, we use the management framework of CSP to understand the voluntary behavior of companies. At the empirical level, we investigate nanotech industry participation in the Environmental Protection Agency’s Nanoscale Materials Stewardship Program (NMSP) as an example of CSP, in order to examine the effects of company characteristics on CSP outcomes. The analysis demonstrates that, on the average, older and larger companies for which nanotech is one of the many business activities demonstrate greater CSP as judged by company actions, declarations, and self-evaluations. Such companies tended to submit more of the requested information to the NMSP, including specific information about health and safety, and to claim fewer of the submitted items as confidential business information. They were also more likely to have on-line statements of generic and nano-specific corporate social responsibility principles, policies, and achievements. The article suggests a need to encourage smaller and younger companies to participate in voluntary oversight programs for nanotechnology and presents options for better design of these programs.     

Decoding ‘Maximum Entropy’ Deconvolution

For over five decades, the mathematical procedure termed “maximum entropy” (M-E) has been used to deconvolve structure in spectra, optical and otherwise, although quantitative measures of performance remain unknown. Here, we examine this procedure analytically for the lowest two orders for a Lorentzian feature, obtaining expressions for the amount of sharpening and identifying how spurious structures appear. Illustrative examples are provided. These results enhance the utility of this widely used deconvolution approach to spectral analysis.     

Training Multilayer Perceptron with Genetic Algorithms and Particle Swarm Optimization for Modeling Stock Price Index Prediction

Predicting stock market (SM) trends is an issue of great interest among researchers, investors and traders since the successful prediction of SMs’ direction may promise various benefits. Because of the fairly nonlinear nature of the historical data, accurate estimation of the SM direction is a rather challenging issue. The aim of this study is to present a novel machine learning (ML) model to forecast the movement of the Borsa Istanbul (BIST) 100 index. Modeling was performed by multilayer perceptron–genetic algorithms (MLP–GA) and multilayer perceptron–particle swarm optimization (MLP–PSO) in two scenarios considering Tanh (x) and the default Gaussian function as the output function. The historical financial time series data utilized in this research is from 1996 to 2020, consisting of nine technical indicators. Results are assessed using Root Mean Square Error (RMSE), Mean Absolute Percentage Error (MAPE) and correlation coefficient values to compare the accuracy and performance of the developed models. Based on the results, the involvement of the Tanh (x) as the output function, improved the accuracy of models compared with the default Gaussian function, significantly. MLP–PSO with population size 125, followed by MLP–GA with population size 50, provided higher accuracy for testing, reporting RMSE of 0.732583 and 0.733063, MAPE of 28.16%, 29.09% and correlation coefficient of 0.694 and 0.695, respectively. According to the results, using the hybrid ML method could successfully improve the prediction accuracy.     

Dynamic Time Warping Algorithm in Modeling Systemic Risk in the European Insurance Sector

We are looking for tools to identify, model, and measure systemic risk in the insurance sector. To this aim, we investigated the possibilities of using the Dynamic Time Warping (DTW) algorithm in two ways. The first way of using DTW is to assess the suitability of the Minimum Spanning Trees’ (MST) topological indicators, which were constructed based on the tail dependence coefficients determined by the copula-DCC-GARCH model in order to establish the links between insurance companies in the context of potential shock contagion. The second way consists of using the DTW algorithm to group institutions by the similarity of their contribution to systemic risk, as expressed by DeltaCoVaR, in the periods distinguished. For the crises and the normal states identified during the period 2005–2019 in Europe, we analyzed the similarity of the time series of the topological indicators of MST, constructed for 38 European insurance institutions. The results obtained confirm the effectiveness of MST topological indicators for systemic risk identification and the evaluation of indirect links between insurance institutions.     

Research on Risk Contagion among Financial Submarkets in China Based on Complex Networks

As the COVID-19 outbreak has an impact on the global economy, there will be interest in how China’s financial markets function during the outbreak. To investigate the path of risk contagion in China’s financial sub-markets before and after the COVID-19 outbreak, we divided the 2016–2021 period into two phases. Based on the time of the COVID-19 outbreak, we divided the new stage of economic development into pre-epidemic and post-epidemic stages and employed the DCC-GARCH model to investigate the dynamic correlation coefficients among the financial sub-markets in China. Furthermore, we employed complex network theory and the minimum tree model to describe the risk contagion path between two-stage Chinese financial submarkets. Finally, we provided pertinent recommendations for investors and policymakers and conducted a brief discussion based on the findings of the research.     

Chemical and Mechanical Aspect of Entropy-Exergy Relationship

The present research focuses the chemical aspect of entropy and exergy properties. This research represents the complement of a previous treatise already published and constitutes a set of concepts and definitions relating to the entropy–exergy relationship overarching thermal, chemical and mechanical aspects. The extended perspective here proposed aims at embracing physical and chemical disciplines, describing macroscopic or microscopic systems characterized in the domain of industrial engineering and biotechnologies. The definition of chemical exergy, based on the Carnot chemical cycle, is complementary to the definition of thermal exergy expressed by means of the Carnot thermal cycle. These properties further prove that the mechanical exergy is an additional contribution to the generalized exergy to be accounted for in any equilibrium or non-equilibrium phenomena. The objective is to evaluate all interactions between the internal system and external environment, as well as performances in energy transduction processes.