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Technology credit scoring model considering both SME characteristics and economic conditions: The Korean case

Author

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  • T H Moon

    (Yonsei University)

  • S Y Sohn

    (Yonsei University)

Abstract

In order to support small and medium enterprises (SME) with a high degree of growth potential in technology, various kinds of technology credit guarantees are issued to companies that obtain high scores by a technology scorecard in Korea. However, their default rates are reported to be very high. The main goal of this study is to propose a new technology evaluation model that accommodates not only technology-related attributes but also environmental conditions such as firm-specific characteristics and economic situations in the manner of more objective. We then show the superior prediction ability of the proposed model to the existing one. This model also enables to apply to a stress test by considering some worst environmental situations and is expected to be used for the effective management of the various technology funds for SMEs.

Suggested Citation

  • T H Moon & S Y Sohn, 2010. "Technology credit scoring model considering both SME characteristics and economic conditions: The Korean case," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(4), pages 666-675, April.
    • Handle: RePEc:pal:jorsoc:v:61:y:2010:i:4:d:10.1057_jors.2009.7
    DOI: 10.1057/jors.2009.7
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    References listed on IDEAS

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    Cited by:

    1. Francesco Ciampi & Alessandro Giannozzi & Giacomo Marzi & Edward I. Altman, 2021. "Rethinking SME default prediction: a systematic literature review and future perspectives," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(3), pages 2141-2188, March.
    2. Yonghan Ju & So Young Sohn, 2017. "Technology Credit Scoring Based on a Quantification Method," Sustainability, MDPI, vol. 9(6), pages 1-16, June.
    3. Ju, Yonghan & Jeon, Song Yi & Sohn, So Young, 2015. "Behavioral technology credit scoring model with time-dependent covariates for stress test," European Journal of Operational Research, Elsevier, vol. 242(3), pages 910-919.
    4. So Sohn & Yoon Kim, 2013. "Behavioral credit scoring model for technology-based firms that considers uncertain financial ratios obtained from relationship banking," Small Business Economics, Springer, vol. 41(4), pages 931-943, December.
    5. Andreea Costea, 2017. "A Quantitative Approach to Credit Risk Management in the Underwriting Process for the Retail Portfolio," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 20(63), pages 157-186, March.
    6. Ju, Yong Han & Sohn, So Young, 2014. "Updating a credit-scoring model based on new attributes without realization of actual data," European Journal of Operational Research, Elsevier, vol. 234(1), pages 119-126.
    7. Yonghan Ju & So Young Sohn, 2015. "Stress test for a technology credit guarantee fund based on survival analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 66(3), pages 463-475, March.
    8. T H Moon & Y Kim & S Y Sohn, 2011. "Technology credit rating system for funding SMEs," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(4), pages 608-615, April.
    9. Agata Gurzawska & Markus Mäkinen & Philip Brey, 2017. "Implementation of Responsible Research and Innovation (RRI) Practices in Industry: Providing the Right Incentives," Sustainability, MDPI, vol. 9(10), pages 1-26, September.
    10. Agata Gurzawska, 2021. "Responsible Innovation in Business: Perceptions, Evaluation Practices and Lessons Learnt," Sustainability, MDPI, vol. 13(4), pages 1-27, February.
    11. T H Moon & S Y Sohn, 2011. "Survival analysis for technology credit scoring adjusting total perception," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(6), pages 1159-1168, June.
    12. Won Sang Lee & So Young Sohn, 2017. "Identifying Emerging Trends of Financial Business Method Patents," Sustainability, MDPI, vol. 9(9), pages 1-21, September.
    13. In Heo & So Sohn & Eun Ji, 2014. "Effects of the matching fund program on IPO and bankruptcy of SMEs in Korea," Small Business Economics, Springer, vol. 42(1), pages 117-129, January.
    14. Bo Kyeong Lee & So Young Sohn, 2017. "A Credit Scoring Model for SMEs Based on Accounting Ethics," Sustainability, MDPI, vol. 9(9), pages 1-15, September.

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