Credit Access and Zombie Firms: A Study on State-Owned, Private, and Foreign-Invested Firms in A Transition Economy

Vu Nam (), Linh Hai Bui, Tam Minh Tran, Huong Thanh Ha and Lam Dang Nguyen

International Journal of Public Administration, 2023, vol. 46, issue 12, 833-846

Abstract: The existence of zombie firms is one of the more notable problems in many transition economies since these companies can hamper sustainable economic development. This paper examines the impact of credit access on the existence and recovery of zombie firms. Using a comprehensive dataset comprising a large number of firms operating in Vietnam during the period from 2006 to 2015, we find that having access to credit reduces the likelihood that a firm is a zombie. We also find that credit access is only useful for firms to escape from being zombies up to a certain threshold. While access to credit reduces the likelihood of private domestic firms being zombies, the study finds that it has no significant effect on state-owned and foreign invested firms. Moreover, the impact of credit access is only detected when firms borrow from formal sources of credit.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/01900692.2022.2025830 (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:lpadxx:v:46:y:2023:i:12:p:833-846

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/lpad20

DOI: 10.1080/01900692.2022.2025830

Access Statistics for this article

International Journal of Public Administration is currently edited by Ali Farazmand

More articles in International Journal of Public Administration from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().