 How do zombie firms affect innovation: from the perspective of credit resources distortionXiaole Qiao, Lin Song and Xiaomin Fan Asian-Pacific Economic Literature, 2022, vol. 36, issue 1, 67-87 Abstract: Excessive support from banks and governments to poorly‐performing firms, making them zombie firms, distorts financial resources—a common factor in firm innovation. Using a large sample of Chinese industrial firms, this paper investigates the impact of zombie firms on the innovation of healthy firms. The results indicate that the prevalence of zombie firms reduces the patent output of healthy firms and seriously jeopardises innovation. Endogeneity analyses and robustness checks validate the results. Further analysis reveals that zombie firms distort the credit resources of healthy firms, especially those that are state‐owned or in high‐tech industries, thereby reducing innovation output. However, the higher financial marketisation of provinces can alleviate this negative effect. This study contributes to an understanding of the negative consequences of zombie firms due to the distortion of credit and provides some policy implications for the disposal of zombies to promote high‐quality economic development. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:apacel:v:36:y:2022:i:1:p:67-87 Ordering information: This journal article can be ordered from Access Statistics for this article Asian-Pacific Economic Literature is currently edited by Yixiao Zhou More articles in Asian-Pacific Economic Literature from The Crawford School, The Australian National University |
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