Analysis of decision making factors for equity investment by DEMATEL and Analytic Network Process

Wen Shiung Lee, Yi-Hou Huang, Yong Yang Chang, Chiao Ming Cheng

Research output: Contribution to journalArticlepeer-review

100 Scopus citations

Abstract

Existing methodologies of equity investment, such as fundamental analysis, technical analysis, and institutional investor analysis, explore important factors of stock price behaviors. However, the interdependent relationships of the key factors have not yet been fully studied. This paper provides the first analysis on the interactive relationships among the factors in incorporating the methods of Decision Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Network Process (ANP). The empirical results show that factors from the existing analytical methodologies have significant interactive and self-feedback dynamics. Among the key factors, profitability is the most important one affecting investment decision, followed by growth and trading volume. In addition, due to the complexity of the ANP, this study proposes a new methodology to simplify the process, and empirical evidences indicate that the approach is effective and efficient.

Original languageEnglish
Pages (from-to)8375-8383
Number of pages9
JournalExpert Systems with Applications
Volume38
Issue number7
DOIs
StatePublished - 1 Jul 2011

Keywords

  • ANP
  • DEMATEL
  • Investment strategy

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