DefaultGNN: A Dual-Perspective GNN Framework for Predicting Corporate Default from Buyer-Seller Transaction Networks

Abstract:Corporate default prediction is a core problem in financial risk management, yet traditional credit models rely heavily on financial statements that are often sparse or unavailable for many firms. Corporate transaction networks offer a complementary view of real economic activity, but how risk propagates through buyer-seller relationships remains underexplored. We conduct a large-scale empirical study using real-world electronic tax-invoice data spanning six years that links transaction histories with default events, revealing that transaction-driven risk is both role-dependent (buyer or seller) and scale-dependent. Based on these findings, we construct multiplex buyer-view and seller-view transaction networks and propose DefaultGNN, a dual-perspective graph neural network-based framework for corporate default prediction. DefaultGNN integrates both views to model how risk flows through transactional relationships, achieving strong improvements over both attribute-based and graph-based baselines, especially for firms with limited intrinsic risk signals. We further provide interpretable network-based explanations by visualizing how distressed trading partners contribute to default risk. In collaboration with a licensed credit rating agency, we validate that DefaultGNN's predictions complement existing credit scoring models, improving approval rates by 7-11%p without increasing default risk among approved firms. The source code can be found at this https URL

Machine Learning (cs.LG); Artificial Intelligence (cs.AI)

arXiv:2609.25542 [cs.LG]

(or arXiv:2609.25542v1 [cs.LG] for this version)

https://doi.org/10.48550/arXiv.2609.25542 Focus to learn more arXiv-issued DOI via DataCite (pending registration)

https://doi.org/10.1145/3799682.3840153 Focus to learn more DOI(s) linking to related resources

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