Identifying and Predicting the Credit Risk of Small and Medium-Sized Enterprises in Sustainable Supply Chain Finance: Evidence from China

Yubin Yang, Xuejian Chu, Ruiqi Pang, Feng Liu and Peifang Yang
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Yubin Yang: School of Management, Shanghai University, Shanghai 200444, China
Xuejian Chu: School of Management, Shanghai University, Shanghai 200444, China
Ruiqi Pang: School of Management, Shanghai University, Shanghai 200444, China
Feng Liu: School of Management, Shanghai University, Shanghai 200444, China
Peifang Yang: School of Management, Shanghai University, Shanghai 200444, China

Sustainability, 2021, vol. 13, issue 10, 1-19

Abstract: COVID-19 has created a strong demand for supply chain finance (SCF) for small and medium-sized enterprises (SMEs). However, the rapid development of SCF leads to more complex credit risks. How to effectively discriminate and manage SMEs to reduce credit risk has become one of the most critical issues in SCF. In addition, sustainable SCF (SSCF) has received increasing attention, and credit risk management is important to achieve SSCF. Therefore, it is significant to identify the key factors influencing the credit risk of SMEs and construct a prediction model to promote SSCF. This study uses the lasso-logistic model to identify factors influencing the credit risk of SMEs and to predict the credit risk of SMEs. The empirical results show that (i) the key factors influencing SMEs’ credit risk include six variables—the matching degree of order data, ratio of contract enforcement, number of contract defaults, degree of business concentration, and number of administrative penalties; and (ii) the lasso-logistic model can identify the key factors influencing credit risk and have a better prediction performance. Moreover, transaction credit and reputation supervision significantly influence the credit risk of SMEs.

Keywords: sustainable supply chain finance (SSCF); credit risk; small and medium-sized enterprises (SMEs); transaction credit; reputation supervision; lasso-logistic model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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