Exploiting Expert Knowledge for Assigning Firms to Industries: A Novel Deep Learning Method
Authors: Zhao, Xiaohang; Fang, Xiao; He, Jing; Huang, Lihua
Journal: MIS Quarterly (2023)
<jats:p>Industry assignment, which assigns firms to industries according to a predefined industry classification system (ICS), is fundamental to a large number of critical business practices, ranging from operations and strategic decision-making by firms to economic analyses by government agencies. Three types of expert knowledge are essential to effective industry assignment: definition-based knowledge (i.e., expert definitions of each industry), structure-based knowledge (i.e., structural relationships among industries as specified in an ICS), and assignment-based knowledge (i.e., prior firm-industry assignments performed by domain experts). Existing industry assignment methods utilize only assignment-based knowledge to learn a model that classifies unassigned firms to industries, overlooking definition-based and structure-based knowledge. Moreover, these methods only consider which industry a firm has been assigned to, ignoring the time-specificity of assignment-based knowledge, i.e., when the assignment occurs. To address the limitations of existing methods, we propose a novel deep learning-based method that not only seamlessly integrates the three types of knowledge for indus…