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Risk Contagion Mechanism and Control Strategies in Supply Chain Finance Using SEIR Epidemic Model from the Perspective of Commercial Banks

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  • Xiaojing Liu

    (School of Civil Engineering, Southwest Jiaotong University Hope College, Chengdu 610400, China)

  • Jie Gao

    (School of Innovation and Entrepreneurship, Shandong University, Qingdao 266237, China)

  • Mingfeng He

    (School of Statistics, Chengdu University of Information Technology, Chengdu 610031, China)

Abstract

Over the past decade, the rapid growth of supply chain finance (SCF) in developing countries has made it a key profit driver for commercial banks and financial firms. In parallel, financial risk control in SCF has attracted more and more attention from financial service providers and has gained research momentum in recent years. This study analyzes the contagion mechanism of SCF-related risks faced by commercial banks through examining SCF network topology. First, this study uses complex network theory to integrate an SEIR epidemic model (Susceptible–Exposed–Infectious–Recovered) into financial risk management. The model simulates how financial risks spread in supply chain finance (SCF) under banks’ strategic, tactical, or operational interventions. Then, some key points for financial risk control from the perspective of commercial banks are obtained by investigating the risk stability threshold of the financial network of SCF and its stability. Numerical simulations show that effective interventions—such as strengthening loan guarantees to reduce the number of exposed firms—significantly curb risk transmission by restricting its scope and shortening its duration. This research provides commercial banks with a quantitative framework to analyze risk propagation and actionable strategies to optimize SCF risk control, enhancing financial system stability and offering practical guidance for preventing systemic risks.

Suggested Citation

  • Xiaojing Liu & Jie Gao & Mingfeng He, 2025. "Risk Contagion Mechanism and Control Strategies in Supply Chain Finance Using SEIR Epidemic Model from the Perspective of Commercial Banks," Mathematics, MDPI, vol. 13(13), pages 1-24, June.
    • Handle: RePEc:gam:jmathe:v:13:y:2025:i:13:p:2051-:d:1683891
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    References listed on IDEAS

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