Zombies at Large? Corporate Debt Overhang and the Macroeconomy

Oscar Jorda, Martin Kornejew, Moritz Schularick and Alan Taylor
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Martin Kornejew: Universität Bonn = University of Bonn

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Abstract: Debt overhang is associated with higher financial fragility and slower recovery from recession. However, while household credit booms have been extensively documented to have this property, we find that corporate debt does not fit the same pattern. Newly collected data on nonfinancial business liabilities for 18 advanced economies over the past 150 years shows that, in the aggregate, greater frictions in corporate debt resolution make for slower recoveries, with weak investment and more persistent "zombie firms" and that this is an important factor in explaining the difference in outcomes relative to household credit booms.

Keywords: Corporate debt; Business cycles; Local projections (search for similar items in EconPapers)
Date: 2022-10-01
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Citations: View citations in EconPapers (10)

Published in Review of Financial Studies, 2022, 35 (10), pp.4561-4586. ⟨10.1093/rfs/hhac018⟩

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Related works:
Journal Article: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2022)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2022)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2021)
Working Paper: Zombies at large? Corporate debt overhang and the macroeconomy (2020)
Working Paper: Zombies at large? Corporate debt overhang and the macroeconomy (2020)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2020)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2020)
Working Paper: Zombies at Large? Corporate Debt Overhang and the Macroeconomy (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03935641

DOI: 10.1093/rfs/hhac018

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