Research On The Contagious Path Of Debt Default Risks Within Enterprise Group

In the macro context of deleveraging,domestic monetary policy is tightening,Chinese enterprises are facing the problem of tightening external financing,and the impact of the epidemic has put Chinese enterprises in a severe financial liquidity crisis.After 2018,the scale of bond defaults rose rapidly,and debt defaults were frequent.In 2020,the debt crisis broke out in a concentrated manner,and a total of 191 defaulted bonds appeared nationwide,involving a scale of238.396 billion yuan,which was the largest year of "thunder".Among them,many debt defaults are caused by large conglomerates,and the number of defaulted bonds reached 139.In recent years,China’s economy has entered a downward cycle,coupled with the impact of the epidemic,the risks accumulated by enterprises in the case of high debt have become increasingly prominent.The risk of debt default is more complex than that of individual enterprises.Once a debt default occurs,it will be further contagious between parents and subsidiaries through the group’s internal network of affiliates,and even spread to external affiliates and financial institutions,causing more serious consequences.This paper studies the contagion path of debt default risk,on the one hand,it is helpful to enrich the theoretical research on the contagion of debt default risk of enterprise groups.On the other hand,it can provide advice on the prevention and control of debt default risk contagion for enterprise groups,so as to avoid the entire group falling into the quagmire of debt default.This paper first summarizes the research status of debt default risk contagion at home and abroad,and explains the relevant overview and theoretical basis of the research.On this basis,a framework is established and the analysis is carried out.Firstly,Yihua Group,a leading furniture enterprise with huge debt default,was selected to sort out the whole process of debt default risk contagion according to the infectious disease model theory,and divided the risk contagion path into direct contact infection,indirect contact infection and vertical contact infection,so as to provide suggestions for the prevention and control of the group’s debt default risk contagion.On this basis,this paper attempts to develop a "vaccine" for the risk of debt default of enterprise groups,and the research draws the following enlightenments: First,enterprise groups should control the source of risk infection in a timely manner and control the expansion of risk scope from the source.Through the establishment of an enterprise’s risk early warning mechanism,the company’s risk is dynamically monitored,and the subsidiaries with low credit ratings and higher risks are monitored,and efforts are made to achieve early detection,early identification and early intervention.The second is to strengthen the construction of the "firewall",handle the synergy and isolation relationship in the business layout,and cut off the contagion route of debt default risk.At the same time,the Group strictly controls the approval process of guarantee matters,rationally configures the guarantee network,establishes a more harmonious guarantee and credit environment,and reduces the adverse impact of indirect contact contagion in the process of contagion of debt default risk.Third,enterprise entities should improve their ability to resist risks,appropriately adopt leveraged financing,carefully consider the relevant decisions and measures of enterprise mergers and acquisitions and expansion,and comprehensively improve the solvency of enterprises on the basis of combining their own operating capabilities,profitability levels and development potential,so as to improve the group’s ability to resist risks.