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Credit Risk Diffusion in Supply Chain Finance: A Complex Networks Perspective

Author

Listed:
  • Zebin Zhao

    (School of Management, Harbin Institute of Technology, Harbin 150001, China)

  • Dongling Chen

    (School of Management, Harbin Institute of Technology, Harbin 150001, China)

  • Luqi Wang

    (School of Management, Harbin Institute of Technology, Harbin 150001, China)

  • Chuqiao Han

    (School of Management, Harbin Institute of Technology, Harbin 150001, China)

Abstract

The diffusion of credit risk in a supply chain finance network can cause serious consequences. Using the “1 + M + N” complex network model with BA scale-free characteristics, this paper studies the credit risk diffusion in a supply chain finance network, where the credit risk diffusion process is simulated by the SIS epidemic model. We examine the impacts of various key factors, including the general financing ratio, cure time, network structure, and network scale on the credit risk diffusion process. It is found that credit risk diffusion rarely occurs in a network with a low average degree. When the average degree of the network increases, the occurrence of the credit risk diffusion becomes more frequent. Besides, the degree of the initially infected nodes with credit risk does not affect the density of the infected nodes in the steady state, while a higher degree of the cure nodes helps restrain the diffusion of credit risk in the supply chain finance network. Finally, the simulation result based on the supply chain finance network with a core node indicates that the diffusion of the credit risk diffusion in sparse supply chain finance networks with low average degrees is unstable. The results provide better understandings on the credit risk diffusion in supply chain finance networks.

Suggested Citation

  • Zebin Zhao & Dongling Chen & Luqi Wang & Chuqiao Han, 2018. "Credit Risk Diffusion in Supply Chain Finance: A Complex Networks Perspective," Sustainability, MDPI, vol. 10(12), pages 1-20, December.
  • Handle: RePEc:gam:jsusta:v:10:y:2018:i:12:p:4608-:d:188154
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    References listed on IDEAS

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    2. Ratri Parida & Manoj Kumar Dash & Anil Kumar & Edmundas Kazimieras Zavadskas & Sunil Luthra & Eyob Mulat‐weldemeskel, 2022. "Evolution of supply chain finance: A comprehensive review and proposed research directions with network clustering analysis," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 1343-1369, October.
    3. Jianhua Chen & Ting Yin, 2023. "Transmission Mechanism of Post-COVID-19 Emergency Supply Chain Based on Complex Network: An Improved SIR Model," Sustainability, MDPI, vol. 15(4), pages 1-19, February.
    4. Yubin Yang & Xuejian Chu & Ruiqi Pang & Feng Liu & Peifang Yang, 2021. "Identifying and Predicting the Credit Risk of Small and Medium-Sized Enterprises in Sustainable Supply Chain Finance: Evidence from China," Sustainability, MDPI, vol. 13(10), pages 1-19, May.
    5. Binghui Wu & Tingting Duan, 2019. "Nonlinear Dynamics Characteristic of Risk Contagion in Financial Market Based on Agent Modeling and Complex Network," Complexity, Hindawi, vol. 2019, pages 1-12, June.

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