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Mathematical Problems in Engineering
Volume 2014, Article ID 538594, 12 pages
Research Article

Combination of Biorthogonal Wavelet Hybrid Kernel OCSVM with Feature Weighted Approach Based on EVA and GRA in Financial Distress Prediction

Department of Management Science and Engineering, School of Economics and Management, Southeast University, Jiangsu, Nanjing 210096, China

Received 16 June 2014; Accepted 15 September 2014; Published 29 September 2014

Academic Editor: Wei-Chiang Hong

Copyright © 2014 Chao Huang et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


Financial distress prediction plays an important role in the survival of companies. In this paper, a novel biorthogonal wavelet hybrid kernel function is constructed by combining linear kernel function with biorthogonal wavelet kernel function. Besides, a new feature weighted approach is presented based on economic value added (EVA) and grey relational analysis (GRA). Considering the imbalance between financially distressed companies and normal ones, the feature weighted one-class support vector machine based on biorthogonal wavelet hybrid kernel (BWH-FWOCSVM) is further put forward for financial distress prediction. The empirical study with real data from the listed companies on Growth Enterprise Market (GEM) in China shows that the proposed approach has good performance.