The Contagion of Associated Credit Risk Based on the Real Estate Companies Network

Abstract

This paper discusses the structural characteristics of the real estate company’s related network and the contagion law of the associated credit risk by constructing a model of associated credit risk contagion based on the real estate enterprise network.The study showed that the real estate companies network has the power-law characteristics of a scale-free network, the network density of parent companies is relatively high, local subsidiaries are isolated and the path becomes longer. At the same time, leading companies with different associated structures have significant differences in the impact on the rest of the companies after default. Furthermore, the credit risk of companies with complex relational structures is more difficult to affect individuals in the network.