A simulation approach to model cascading bankruptcy of interdependent business network
Bao Wu1,2, Mingzhu Li1,2, Zihang Ding2
COMPUTER MODELLING & NEW TECHNOLOGIES 2014 18(12C) 1254-1258
1 China Institute for Small and Medium Enterprises, Zhejiang University of Technology, Hangzhou, Zhejiang, P.R.China
2 Collage of Business and Administration, Zhejiang University of Technology, Hangzhou, Zhejiang, P.R.China
The article proposed a simulation technique which illustrates the cascading process of financial failure through interdependent business network. Based on theoretical modelling of inter-firm risk propagation, network dynamics of risk contagion was integrated into the simulation model proposed by the article. And the simulation approach was applied to two realistic cases with quite different Network Paradigms. Simulation results showed the method suggested by the article is effective.