Research On Credit Risk Of Corporate Groups Based On Brittleness Management Of Complex Financial Network

Subprime lending crisis is spreading these years and the capital contact of enterprisesbecomes more frequent. The demand for low level of credit risk is increasing. How toreduce the credit risk has become an important topic of corporate groups. As everyoneknows,credit risk is closely related with capital activities. The complex capitalnetwork which covers both internal and external nodes of the corporate groups is anew object of research. Brittleness can be used to study the credit risk of corporategroups. Then we can find factors of credit risk and the standard of measuring risk. Inthis way the credit risk can be managed and controlled. The research provides a newtool for the management of credit risk in corporate groups.The research mainly focus on three aspects.The first aspect is the construction andverification of the complex capital network of corporate groups—The research findsnodes and capital relation of the network based on the organizational structure ofcorporate groups. The network not only contains internal nodes, but also coversexternal nodes. The second aspect is the factor analysis of brittleness—The researchgets the brittle factors,the brittle events, the brittle degree and factors that affect thecredit risk of corporate groups. The research also provides the way of measuringcredit risk.The third aspect is the managerial model of credit risk for corporategroups—Datas drawn from the operation can be used in management of credit and thework can be done well from both quantitative and qualitative aspects.In the process of research on theory, the research searches for information of Englishand Chinese literature. The basis of knowledge about corporate groups, capital, creditrisk, complex networks, brittleness and factor analysis laid a good foundation forfurther study.In the process of empirical analysis, the research uses softwares—UCINET and SPSSfor the study of complex networks and factor analysis. The research uses UCINET forthe study about the basic properties and the rationality of the network.The softwareSPSS is used to do the factor analysis of brittleness. Based on the use of softwares,theresearch finds out main problems that need to work out and gets conclusions. At thesame time, the empirical analysis focus on a representative case—Huarun group. In the process of establishment of complex capital network model of corporate groupsand the following factor analysis, the study searchs for the financial statements ofHuarun group from the year2002to the year2011. Then the work of classification,analysis and sorting is done. These work is the proof of demonstration. In the fifthchapter, in-depth and detailed analysis about Huarun group is done.Then themanagerial model of risk in Huarun group is established. The results of the researchcan be used in the management of credit risk and can provide a feasible basis.The research mainly gets the following conclusions:The research establishes the model of complex capital network of corporate groups.Previous studies pay more attention on internal nodes of capital operation, but thisresearch breaks the previous assumption, it sets up the complex financial network ofcorporate groups which includes both internal and external nodes of the corporategroups. And these provides basements for research on the credit risk of corporategroups.Brittleness is applied to management of credit risk of corporate groups. The researchgets three big essential factors that influence credit risk—the strength of asset,theliquidity of cash flow and the level of leverage. Risk should be measured, and brittledegree can be used as a measurement of credit risk of corporate groups. In theresearch, Huarun group is studied as an example, the brittle degree of brittle factorscan be gotten, and used as a basis of management of credit risk.The research sets up managerial model of credit risk. The study considers practicalproblems in the process of development, from both quantitative and qualitativeaspects. On the basis of managerial model of credit risk,the managerial process ofcredit risk is clear and it provides basis for management.