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The co-evolution of integrated corporate financial networks and supply chain networks with insolvency risk

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  • Zugang Liu

Abstract

In this paper, we develop a modeling framework that integrates supply chain networks and corporate financial networks, and studies the co-evolution of the two types of networks. The framework allows one to investigate the following questions: (1) How do the physical product flows, demands and prices interplay with the corporate financial networks, and evolve over time with varying financial and economic conditions? (2) How do the financial flows, profits, and insolvency risks interplay with the supply chain networks, and evolve over time with varying financial and economic conditions? We illustrate the modeling framework with computational studies. In particular, the computational results demonstrate how the two types of networks interplay and evolve in a business environment similar to the one during the 2008–2009 financial crisis in which the credit markets tightened up and the product demands continued to decline. Copyright Springer-Verlag Berlin Heidelberg 2013

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  • Zugang Liu, 2013. "The co-evolution of integrated corporate financial networks and supply chain networks with insolvency risk," Computational Management Science, Springer, vol. 10(2), pages 253-275, June.
    • Handle: RePEc:spr:comgts:v:10:y:2013:i:2:p:253-275
    DOI: 10.1007/s10287-013-0161-y
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    References listed on IDEAS

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    1. Liu, Zugang & Cruz, Jose M., 2012. "Supply chain networks with corporate financial risks and trade credits under economic uncertainty," International Journal of Production Economics, Elsevier, vol. 137(1), pages 55-67.
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    7. Nagurney, Anna & Ke, Ke, 2006. "Financial networks with intermediation: Risk management with variable weights," European Journal of Operational Research, Elsevier, vol. 172(1), pages 40-63, July.
    8. Zugang Liu & Anna Nagurney, 2007. "Financial Networks with Intermediation and Transportation Network Equilibria: A Supernetwork Equivalence and Reinterpretation of the Equilibrium Conditions with Computations," Computational Management Science, Springer, vol. 4(3), pages 243-281, July.
    9. Yaron Leitner, 2005. "Financial Networks: Contagion, Commitment, and Private Sector Bailouts," Journal of Finance, American Finance Association, vol. 60(6), pages 2925-2953, December.
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    Cited by:

    1. Christopher M. Durugbo & Zainab Al-Balushi, 2023. "Supply chain management in times of crisis: a systematic review," Management Review Quarterly, Springer, vol. 73(3), pages 1179-1235, September.

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