How do zombie firms affect the financialization of normal firms?

Yong Qi, Simeng Lyu, Shuo Yang and Shaoyu Dong

Applied Economics Letters, 2023, vol. 30, issue 14, 1940-1945

Abstract: This study examines the relationship between zombie firms and the financialization of normal firms in the context of ‘from real to virtual’. Using data of Chinese listed firms from 2008 to 2019, we find that zombie firms increase the financialization of normal firms. Further, mediating mechanism tests show that total factor productivity and bank loans are two major channels. Moreover, we find that the motivation of corporate financialization is ‘capital arbitrage’, rather than ‘capital reserve’. This study explains the motivation and impact of the financialization of Chinese non-financial companies, elucidates the necessity of disposing of zombie firms, and promotes high-quality economic development.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2022.2086678 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:30:y:2023:i:14:p:1940-1945

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2022.2086678

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().