• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
    • Executive Editor: Ms. Fiona Chu
    • Abstracting/ Indexing:  CNKI, Google Scholar, Electronic Journals Library, Crossref, Ulrich's Periodicals Directory, MESLibrary, etc.
    • E-mail: joebm.editor@gmail.com
JOEBM 2014 Vol.2(2): 139-146 ISSN: 2301-3567
DOI: 10.7763/JOEBM.2014.V2.114

Evaluation of China’s Financial Risk Using Projection Pursuit Clustering Model and Its Positive Research

Jitong Lou, Wengao Lou, and Xiurong Yu

Abstract—The evaluation index system for China’s financial risk (CFR) and its single-index assessment criteria were used to generate sufficient samples. The projection pursuit clustering (PPC) model with a new objective function is applied to evaluate the CFR during 1994 to 2012. Four rules for establishing valid PPC model are put forward in this paper, and the real optimal projection vector coefficients as well as others parameters are obtained by applying artificial bee colony (ABC) algorithm. Positive research shows that PPC model is suited to evaluate CFR, and a valid PPC model as well as six sub-system models for six aspects of CFR is established. The CFR level during 1994 to 2012 generally lies on Proper-safety level except that in 2008 belongs to Risk level. In terms of the six aspects of CFR, the bank risk is the greatest and the second is the risk of economic growth.

Index Terms—Artificial bee colony (ABC) algorithm, China’s financial risk, evaluation index system, projection pursuit clustering (PPC) model.

Jitong Lou is with the Shanghai University, Shanghai, 200444, P R China (e-mail: jitonglou@gmail.com).
Wengao Lou and Xiurong Yu are with the Shanghai Business School, Shanghai, 200235, P R China, corresponding author (e-mail:wlou64@126.com, wglou@sbs.edu.cn, yuxr11@163.com).


Cite:Jitong Lou, Wengao Lou, and Xiurong Yu, "Evaluation of China’s Financial Risk Using Projection Pursuit Clustering Model and Its Positive Research," Journal of Economics, Business and Management vol. 2, no. 2, pp. 139-146, 2014.

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