IDEAS home Printed from https://ideas.repec.org/a/spr/fininn/v9y2023i1d10.1186_s40854-023-00517-y.html
   My bibliography  Save this article

Prioritizing real estate enterprises based on credit risk assessment: an integrated multi-criteria group decision support framework

Author

Listed:
  • Zhen-Song Chen

    (Wuhan University)

  • Jia Zhou

    (Wuhan University)

  • Chen-Ye Zhu

    (Civil Aviation Flight University of China)

  • Zhu-Jun Wang

    (Xi’an Jiaotong University
    University of Maryland)

  • Sheng-Hua Xiong

    (Civil Aviation Flight University of China)

  • Rosa M. Rodríguez

    (University of Jaén)

  • Luis Martínez

    (University of Jaén)

  • Mirosław J. Skibniewski

    (University of Maryland
    Polish Academy of Sciences
    Chaoyang University of Technology)

Abstract

Credit risk assessment involves conducting a fair review and evaluation of an assessed subject’s solvency and creditworthiness. In the context of real estate enterprises, credit risk assessment provides a basis for banks and other financial institutions to choose suitable investment objects. Additionally, it encourages real estate enterprises to abide by market norms and provide reliable information for the standardized management of the real estate industry. However, Chinese real estate companies are hesitant to disclose their actual operating data due to privacy concerns, making subjective evaluation approaches inevitable, occupying important roles in accomplishing Chinese real estate enterprise credit risk assessment tasks. To improve the normative and reliability of credit risk assessment for Chinese real estate enterprises, this study proposes an integrated multi-criteria group decision-making approach. First, a credit risk assessment index for Chinese real estate enterprises is established. Then, the proposed framework combines proportional hesitant fuzzy linguistic term sets and preference ranking organization method for enrichment evaluation II methods. This approach is suitable for processing large amounts of data with high uncertainty, which is often the case in credit risk assessment tasks of Chinese real estate enterprises involving massive subjective evaluation information. Finally, the proposed model is validated through a case study accompanied by sensitivity and comparative analyses to verify its rationality and feasibility. This study contributes to the research on credit assessment for Chinese real estate enterprises and provides a revised paradigm for real estate enterprise credit risk assessment.

Suggested Citation

  • Zhen-Song Chen & Jia Zhou & Chen-Ye Zhu & Zhu-Jun Wang & Sheng-Hua Xiong & Rosa M. Rodríguez & Luis Martínez & Mirosław J. Skibniewski, 2023. "Prioritizing real estate enterprises based on credit risk assessment: an integrated multi-criteria group decision support framework," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-53, December.
    • Handle: RePEc:spr:fininn:v:9:y:2023:i:1:d:10.1186_s40854-023-00517-y
    DOI: 10.1186/s40854-023-00517-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s40854-023-00517-y
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1186/s40854-023-00517-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Li, Yaoyao & Zhu, Daolin & Zhao, Jiangmeng & Zheng, Xiaodong & Zhang, Lanyue, 2020. "Effect of the housing purchase restriction policy on the Real Estate Market: Evidence from a typical suburb of Beijing, China," Land Use Policy, Elsevier, vol. 94(C).
    2. Kanno, Masayasu, 2022. "Exploring risks in syndicated loan networks: Evidence from real estate investment trusts," Economic Modelling, Elsevier, vol. 115(C).
    3. Yongrok Choi & Xiaoxia Ye & Lu Zhao & Amanda C. Luo, 2016. "Optimizing enterprise risk management: a literature review and critical analysis of the work of Wu and Olson," Annals of Operations Research, Springer, vol. 237(1), pages 281-300, February.
    4. Gloria Bordogna & Gabriella Pasi, 1993. "A fuzzy linguistic approach generalizing Boolean Information Retrieval: A model and its evaluation," Journal of the American Society for Information Science, Association for Information Science & Technology, vol. 44(2), pages 70-82, March.
    5. WeiMing Mou & Wing-Keung Wong & Michael McAleer, 2018. "Financial Credit Risk Evaluation Based on Core Enterprise Supply Chains," Sustainability, MDPI, vol. 10(10), pages 1-17, October.
    6. Quanbo Zha & Gang Kou & Hengjie Zhang & Haiming Liang & Xia Chen & Cong-Cong Li & Yucheng Dong, 2020. "Opinion dynamics in finance and business: a literature review and research opportunities," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-22, December.
    7. Wenjuan Liu, 2021. "Enterprise Credit Risk Management Using Multicriteria Decision-Making," Mathematical Problems in Engineering, Hindawi, vol. 2021, pages 1-10, November.
    8. Yubin Yang & Xuejian Chu & Ruiqi Pang & Feng Liu & Peifang Yang, 2021. "Identifying and Predicting the Credit Risk of Small and Medium-Sized Enterprises in Sustainable Supply Chain Finance: Evidence from China," Sustainability, MDPI, vol. 13(10), pages 1-19, May.
    9. Alastair Adair & Norman Hutchison, 2005. "The reporting of risk in real estate appraisal property risk scoring," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 23(3), pages 254-268, June.
    10. Vicente Salas & Jesús Saurina, 2002. "Credit Risk in Two Institutional Regimes: Spanish Commercial and Savings Banks," Journal of Financial Services Research, Springer;Western Finance Association, vol. 22(3), pages 203-224, December.
    11. Yongrok Choi & Xiaoxia Ye & Lu Zhao & Amanda Luo, 2016. "Optimizing enterprise risk management: a literature review and critical analysis of the work of Wu and Olson," Annals of Operations Research, Springer, vol. 237(1), pages 281-300, February.
    12. Daniel Ferreira & Marcelo Rezende, 2007. "Corporate strategy and information disclosure," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 164-184, March.
    13. Verónica Sansabas-Villalpando & Iván Juan Carlos Pérez-Olguín & Luis Asunción Pérez-Domínguez & Luis Alberto Rodríguez-Picón & Luis Carlos Mendez-González, 2019. "CODAS HFLTS Method to Appraise Organizational Culture of Innovation and Complex Technological Changes Environments," Sustainability, MDPI, vol. 11(24), pages 1-28, December.
    14. Yuehua Xia & Honggen Long & Zhi Li & Jiasen Wang, 2022. "Farmers’ Credit Risk Assessment Based on Sustainable Supply Chain Finance for Green Agriculture," Sustainability, MDPI, vol. 14(19), pages 1-20, October.
    15. Kim Hiang Liow, 2008. "Financial Crisis and Asian Real Estate Securities Market Interdependence: Some Additional Evidence," Journal of Property Research, Taylor & Francis Journals, vol. 25(2), pages 127-155, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alberto Cerezo-Narváez & Andrés Pastor-Fernández & Manuel Otero-Mateo & Pablo Ballesteros-Pérez, 2022. "The Influence of Knowledge on Managing Risk for the Success in Complex Construction Projects: The IPMA Approach," Sustainability, MDPI, vol. 14(15), pages 1-30, August.
    2. Wang, Delu & Tong, Xian & Wang, Yadong, 2020. "An early risk warning system for Outward Foreign Direct Investment in Mineral Resource-based enterprises using multi-classifiers fusion," Resources Policy, Elsevier, vol. 66(C).
    3. Xu, Xiaodong & Mu, Yayu & Wang, Juan, 2023. "Corporate risk and financial asset holdings," Pacific-Basin Finance Journal, Elsevier, vol. 81(C).
    4. Tobias Rebs & Marcus Brandenburg & Stefan Seuring & Margarita Stohler, 2018. "Stakeholder influences and risks in sustainable supply chain management: a comparison of qualitative and quantitative studies," Business Research, Springer;German Academic Association for Business Research, vol. 11(2), pages 197-237, September.
    5. Alessandra Canepa & Fawaz Khaled, 2018. "Housing, Housing Finance and Credit Risk," IJFS, MDPI, vol. 6(2), pages 1-23, May.
    6. Zhang, Lu & Cui, Li & Chen, Lujie & Dai, Jing & Jin, Ziyi & Wu, Hao, 2023. "A hybrid approach to explore the critical criteria of online supply chain finance to improve supply chain performance," International Journal of Production Economics, Elsevier, vol. 255(C).
    7. Murinde, Victor & Zhao, Tianshu, 2009. "Bank competition, risk taking and productive efficiency: Evidence from Nigeria's banking reform experiments," Stirling Economics Discussion Papers 2009-23, University of Stirling, Division of Economics.
    8. Daniel Ferreira & Thomas Kittsteiner, 2016. "When Does Competition Foster Commitment?," Management Science, INFORMS, vol. 62(11), pages 3199-3212, November.
    9. Carmen Orden‐Cruz & Jessica Paule‐Vianez & Júlio Lobão, 2023. "The effect of Economic Policy Uncertainty on the credit risk of US commercial banks," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 3420-3436, July.
    10. Danisman, Gamze Ozturk & Tarazi, Amine, 2024. "Economic policy uncertainty and bank stability: Size, capital, and liquidity matter," The Quarterly Review of Economics and Finance, Elsevier, vol. 93(C), pages 102-118.
    11. Umoren A. A & Akpan S. B. & Udoh E. J., 2016. "Analysis of Empirical Relationship among Agricultural Lending, Agricultural Growth and Non-Performing Loans in Nigerian Banking System," Economy, Asian Online Journal Publishing Group, vol. 3(2), pages 94-101.
    12. Gabriel Jiménez & Jose A. Lopez & Jesus Saurina, 2009. "Empirical Analysis of Corporate Credit Lines," The Review of Financial Studies, Society for Financial Studies, vol. 22(12), pages 5069-5098, December.
    13. Michael Brei & Carlos Winograd, 2018. "Credit risk of foreign bank branches and subsidiaries in Argentina and Uruguay," EconomiX Working Papers 2018-12, University of Paris Nanterre, EconomiX.
    14. Vicente, Cuñat & Luis, Garicano, 2010. "Did Good Cajas Extend Bad Loans? Governance, Human Capital and Loan Portfolios," MPRA Paper 42434, University Library of Munich, Germany.
    15. Thi Kim Nguyen & Muhammad Najib Razali, 2020. "The dynamics of listed property companies in Indonesia," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 38(2), pages 91-106, January.
    16. Love, Inessa & Turk Ariss, Rima, 2014. "Macro-financial linkages in Egypt: A panel analysis of economic shocks and loan portfolio quality," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 28(C), pages 158-181.
    17. Ramazan Göral, 2015. "Competitive Analysis of the Hotel Industry in Konya by Using Porter’s Five Forces Model," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 1, ejes_v1_i.
    18. Abuzayed, Bana & Ben Ammar, Mouldi & Molyneux, Philip & Al-Fayoumi, Nedal, 2024. "Corruption, lending and bank performance," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 802-830.
    19. Kaelo Mpho Ntwaepelo, 2021. "The Effects of Macroprudential and Monetary Policy Shocks in BRICS economies," Economics Discussion Papers em-dp2021-20, Department of Economics, University of Reading.
    20. Tomoya Tajika, 2021. "Persistent and snap decision‐making," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(1), pages 203-227, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:fininn:v:9:y:2023:i:1:d:10.1186_s40854-023-00517-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.