Philip Cheng

GenSo-EWS: a novel neural-fuzzy based early warning system for predicting bank failures

Bank failure prediction is an important issue for the regulators of the banking industries. The collapse and failure of a bank could trigger an adverse financial repercussion and generate negative impacts such as a massive bail out cost for the failing bank and loss of confidence from the investors and depositors. Very often, bank failures are due to financial distress. Hence, it is desirable to have an early warning system (EWS) that identifies potential bank failure or high-risk banks through the traits of financial distress. Various traditional statistical models have been employed to study bank failures [J Finance 1 (1975) 21; J Banking Finance 1 (1977) 249; J Banking Finance 10 (1986) 511; J Banking Finance 19 (1995) 1073]. However, these models do not have the capability to identify the characteristics of financial distress and thus function as black boxes. This paper proposes the use of a new neural fuzzy system [Foundations of neuro-fuzzy systems, 1997], namely the Generic Self-organising Fuzzy Neural Network (GenSoFNN) [IEEE Trans Neural Networks 13 (2002c) 1075] based on the compositional rule of inference (CRI) [Commun ACM 37 (1975) 77], as an alternative to predict banking failure. The CRI based GenSoFNN neural fuzzy network, henceforth denoted as GenSoFNN-CRI(S), functions as an EWS and is able to identify the inherent traits of financial distress based on financial covariates (features) derived from publicly available financial statements. The interaction between the selected features is captured in the form of highly intuitive IF-THEN fuzzy rules. Such easily comprehensible rules provide insights into the possible characteristics of financial distress and form the knowledge base for a highly desired EWS that aids bank regulation. The performance of the GenSoFNN-CRI(S) network is subsequently benchmarked against that of the Coxs proportional hazards model [J Banking Finance 10 (1986) 511; J Banking Finance 19 (1995) 1073], the multi-layered perceptron (MLP) and the modified cerebellar model articulation controller (MCMAC) [IEEE Trans Syst Man Cybern: Part B 30 (2000) 491] in predicting bank failures based on a population of 3635 US banks observed over a 21 years period. Three sets of experiments are performed-bank failure classification based on the last available financial record and prediction using financial records one and two years prior to the last available financial statements. The performance of the GenSoFNN-CRI(S) network as a bank failure classification and EWS is encouraging.

Knowledge repositories in knowledge cities: institutions, conventions and knowledge subnetworks

Suggests another dimension of research in, and application of, knowledge management. This theoretical paper adopts a conceptual, multi‐disciplinary approach. First, knowledge can be stored and transmitted via institutions. Second, knowledge “subnetworks” or smaller groupings within larger networks can become key repositories of knowledge. The concept of knowledge “subnetworks” needs to be tested against empirical evidence, which should include a cross‐national comparison of knowledge‐based cities. The paper provides some insights to policy makers in designing or developing global cities. It is one of the few papers that discusses the connection between knowledge management and growth of global cities.

Organizational change in stakeholder business systems: the role of institutions

Purpose – The purpose of this paper is threefold: to contribute to the increasing global debate in organization theory about corporate ethics; to focus on the importance of measurement costs and its influence on organizational change in stakeholder systems; and to provide a framework for overcoming the inherent ambiguity and increased measurement costs associated with stakeholder business systems.Design/methodology/approach – The approach is to analyze the importance of institutional certification and indirect measurement indicators, which are defined as indices to develop a dynamic framework capable of evaluating change in stakeholder business systems.Findings – The stakeholder business system, a dominant system in continental European countries, as well as various countries in Asia, requires involvement by multiple actors, including financial markets, banks, employees, government.Research limitations/implications – Further research is necessary to analyze in more depth the way organization value can be ...

China's Overseas Chinese Policy in the Globalization Era: Challenges and Responses

Chinas economic reforms and opening to the external world, which began at the end of 1978, have brought impressive economic growth and significant changes. These achievements have been closely related to the contributions of the overseas Chinese community. Some comparisons between Chinas economic reforms and those of the Soviet Union have been made, and there is a view that Chinas relative success owes much to the tens of millions of overseas Chinese. By the beginning of the twentyfirst century, China has reached Deng Xiaopings goal of modest prosperity (xiaokang): economic reforms have achieved considerable success, productivity and comprehensive national power have much improved, and China now enjoys respectable international status. In 2003, per capita GDP in China reached US

Governance Structures of Socially Complex Knowledge Flows: Exchange, Entitlement and Gifts

1,090. The first two decades of the present century is perceived as a period of significant opportunity by the Chinese leadership. As an emerging economic power, China now faces the challenges of economic globalization and market liberalization, as well as the problems of regional disparities, the widening gap between the rich and poor, and the exacerbation of social contradictions. The Chinese authorities are prepared to engage in global economic competition and regional economic co-operation in the process of raising Chinas international competitiveness; domestically, they have to push for effective public

Global sourcing partnerships and emerging MNC markets: a conceptual framework

Abstract The intangible aspects of knowledge transfer in multinational corporations (MNCs) continue to be a crucial area of research in social science research and raise the issue of knowledge governance structures. The purpose of this conceptual note is twofold. Firstly, we believe that there is more than one governance structure for successful knowledge transfers and flows. We provide a typology of three governance structures: “exchange,” “entitlement,” “gifts.” Secondly, most MNCs will need to take advantage of all three or a combination of these three socially complex governance structures.

Intercultural relations in the European Union: Economic convergences verses social mobility

This theoretical paper is about global sourcing partnerships for emerging Multinational Corporations (MNCs), such as Eastern European MNCs and the difficulties they face in accessing local knowledge networks in developed economies, a key issue given the continuing enlargement of the European Union with the addition of new members. Given the socially complex nature of knowledge, knowledge transfer for emerging MNC markets must take into account the institutional factors in emerging markets, including the issue of psychic distance towards emerging markets or economies. We show how countertrade, a nonstandard type of exchange in countries such as Eastern Europe can be seen as a type of institutional commitment accelerating global sourcing and e-procurement partnerships for emerging MNC markets. We show that our general framework of countertrade and hostage-style exchange can also be applied to the uncertainty of global sourcing and e-procurement in the 21st century.

Turning Point: Dual Responsibilities of NGOs

Abstract The purpose of this paper is to analyze intercultural relations within the European Union, with the 10 new members that have joined in 2004. We define intercultural relations in terms of the difference between the benefits of economic convergence versus the problems of social mobility issues implied by the economic convergence in the European Union, especially with regard to the labor market. This analysis has implications for any region that is experiencing rapid globalization.