Skip to main content
SpringerLink
Log in

Global zombie companies: measurements, determinants, and outcomes

  • Published:
Journal of International Business Studies Aims and scope Submit manuscript

Abstract

Academics and practitioners are increasingly concerned about global zombieism, a term used to describe insolvent firms that survive with the support of financial institutions, investors, or governments, particularly during unusual market conditions. Using dual-filters of interest coverage ratio and an empirically validated default prediction model, we propose a new measure to gauge the extent of zombieism in the world’s 20 largest economies. The average zombie share of listed firms has increased significantly since 1990, to about 7% in 2020. Zombie firms are typically found among small and medium-sized enterprises. Economic growth, industry compositions, and lenient monetary policies have strong explanatory power for global zombieism. We show that the presence of zombie firms generates significant market congestion, limiting the growth of healthy firms. We also find that the development of global corporate bond markets contributes to zombie firm growth. Leveraging staggered bankruptcy reforms as an exogenous variation, we find that these reforms lower zombie ratio by 1.4% points. The reduction is more substantial if the bankruptcy law becomes more creditor-friendly. Having failed to recover, zombie firms can survive for an average of 5 years before declaring bankruptcy, being delisted, or being acquired. Bankruptcy reforms accelerate the dissolution of zombie status.

Plain language summary

The worldwide economic difficulties worsened by the COVID-19 pandemic have heightened worries about the zombie firm phenomenon. Zombie firms are distressed (and sometimes insolvent) companies that continue to exist due to backing from financial institutions or government bodies. They are recognized for distorting credit distribution and hindering genuine economic expansion. However, limited research has assessed the prevalence of such entities across a wide range of countries over an extended period. Our research fills this void by determining the degree of zombieism in developed and emerging economies. We gathered data on all publicly traded nonfinancial companies from the World Bank’s top 20 GDP (gross domestic product) economies as of 2020. Our sample includes 489,270 firm-year observations. We use a two-step filtering process to identify zombie firms in these countries over time. We first compute the interest coverage ratio for each company in a year. Then, we apply a second filter based on Altman’s Z-score model and a modified version, the Z″-score model, designed for international companies. Both scores consider companies’ financial health and the likelihood of default. We discover that the average percentage of zombie firms among listed companies increased significantly from 1.5% in 1990 to over 7.0% in 2020 and then slightly decreased to 6.5% in 2021 in the world’s 20 largest economies. Interestingly, the zombie ratio barely altered from the year before the COVID-19 pandemic began to 1 year later. We also find that smaller enterprises have a much greater likelihood of being zombie firms. To validate our measure, we performed multivariate regression analysis to first show that the fraction of zombie firms in an economy is lower if it has high economic growth, stock returns and sovereign ratings but the zombie ratio escalates in environments with accommodating monetary policy. Then we show that non-zombie firms in industries with a higher fraction of zombie firms exhibit reduced investment, diminished sales and employment growth, and fewer new entrants, underscoring notable congestion effects. Our next set of analysis explores whether the fast growth of global corporate debt market contributed to the survival of zombie firms and whether bankruptcy law reforms in a country as a mechanism to resolve zombie firm issues. We find a strong positive relation between the growth of high yield corporate bond market in an economy and the growth of zombie firms. An important evidence uncovered is that countries adopting creditor-friendly bankruptcy laws saw 1.6-percentage-point reduction in zombie ratios after the reforms. Our final analysis investigates the consequences of zombie firms using databases including Bankruptcydata.com, Compustat, Worldscope, SDC, and S&P Transaction. We monitor each company from its initial classification as a zombie until it either disappears from our dataset or recovers. Over half of these companies face bankruptcy or delisting, with a small portion recovering from zombie status. On average, it takes 5 years from being labeled a zombie to bankruptcy or delisting. In conclusion, our research offers multiple contributions to the existing body of literature. We suggest a method that benefits from using universally accessible corporate performance metrics to define zombie firms, enabling more effective cross-country comparisons. Our findings are relevant for policymakers aiming to alleviate the domestic zombie problem while ensuring a favorable legal environment and market development for businesses.

Résumé

Les universitaires et les praticiens sont de plus en plus préoccupés par le zombieisme mondial, un terme utilisé pour décrire les entreprises insolvables qui survivent grâce au soutien des institutions financières, des investisseurs ou des gouvernements, en particulier dans des conditions de marché inhabituelles. Utilisant un double filtre du ratio de couverture des intérêts et un modèle de prédiction des défauts validé empiriquement, nous proposons une nouvelle mesure pour évaluer l'ampleur du zombieisme dans les 20 plus grandes économies du monde. La part moyenne des zombies parmi les entreprises cotées en bourse a considérablement augmenté depuis 1990, pour atteindre environ 7% en 2020. Les entreprises zombies se trouvent généralement parmi les petites et moyennes entreprises. La croissance économique, les compositions des industries et les politiques monétaires indulgentes ont un fort pouvoir explicatif pour le zombieisme mondial. Nous montrons que la présence des entreprises zombies génère une congestion importante du marché, limitant la croissance des entreprises saines. Nous constatons également que le développement des marchés mondiaux d'obligations d'entreprises contribue à la croissance des entreprises zombies. Mobilisant les réformes des faillites échelonnées comme variation exogène, nous observons que ces réformes réduisent le ratio des entreprises zombies de 1,4 point de pourcentage. La réduction est plus importante si la loi sur les faillites devient plus favorable aux créanciers. N'ayant pas réussi à se redresser, les entreprises zombies peuvent survivre pendant cinq ans en moyenne avant de déclarer faillite, d'être retirées de la cote ou d'être rachetées. Les réformes en matière de faillites accélèrent la dissolution du statut d'entreprise zombie.

Resumen

Académicos y profesionales están cada vez más preocupados por el zombieismo global, un término utilizado para describir empresas insolventes que sobreviven con el apoyo de instituciones financieras, inversionistas gobiernos, especialmente durante condiciones de mercado inusuales. Utilizando filtros duales de ratio de cobertura de intereses y un modelo de predicción de impago validado empíricamente, proponemos una nueva medida para calibrar el alcance del zombieismo en las 20 mayores economías del mundo. La proporción media de empresas zombi que cotizan en bolsa ha aumentado significativamente desde 1990, hasta situarse en torno al 7% en 2020. Las empresas zombis suelen encontrarse entre las pequeñas y medianas empresas. El crecimiento económico, la composición de la industria y las políticas monetarias laxas tienen un fuerte poder explicativo del zombieismo mundial. Demostramos que la presencia de empresas zombi genera una importante congestión del mercado, limitando el crecimiento de las empresas sanas. También observamos que el desarrollo de los mercados mundiales de bonos corporativos contribuye al crecimiento de las empresas zombi. Aprovechando las reformas de bancarrota escalonadas como variación exógena, descubrimos que estas reformas reducen la proporción de empresas zombi en 1,4 puntos porcentuales. La reducción es más sustancial si la ley de bancarrota se vuelve más favorable a los acreedores. Al no haberse recuperado, las empresas zombi pueden sobrevivir una media de cinco años antes de declararse en quiebra, dejar de cotizar en bolsa o ser adquiridas. Las reformas de bancarrota aceleran la disolución de la condición de zombi.

Resumo

Acadêmicos e profissionais estão cada vez mais preocupados com o zumbiismo global, um termo utilizado para descrever empresas insolventes que sobrevivem com o auxílio de instituições financeiras, investidores ou governos, especialmente durante condições de mercado incomuns. Utilizando filtros duplos da razão de cobertura de juros e um modelo preditivo padrão validado empiricamente, propomos uma nova medida para avaliar a extensão do zumbiismo nas 20 maiores economias do mundo. O percentual médio de empresas zumbis em empresas listadas aumentou significativamente desde 1990, para cerca de 7% em 2020. Empresas zumbi são normalmente encontradas entre pequenas e médias empresas. Crescimento econômico, a composição do setor, e políticas monetárias brandas têm um forte poder explicativo para o zumbiismo global. Mostramos que a presença de empresas zumbis gera um congestionamento significativo no mercado, limitando o crescimento de empresas saudáveis. Descobrimos também que o desenvolvimento de mercados globais de debêntures corporativas contribui para o crescimento de empresas zumbis. Usando reformas escalonadas sobre falências como uma oscilação exógena, concluímos que estas reformas reduzem a fração de zumbis em 1,4 pontos percentuais. A redução será mais substancial se a lei sobre falências se torna mais favorável a credores. Não tendo conseguido recuperar-se, empresas zumbis podem sobreviver durante uma média de cinco anos antes de abrir falência, serem retiradas de negociação em bolsa ou serem adquiridas. Reformas sobre falências aceleram a dissolução do status de zumbi.

摘要

学者和从业人员越来越关注全球僵尸主义， 这个术语用来描述在金融机构、投资者或政府的支持下生存的无力偿债的公司， 特别是在不寻常的市场条件下。使用利息覆盖率的双重过滤器和经过实证验证的默认预测模型， 我们提出了一种新的量表来衡量世界 20 个最大经济体的僵尸主义程度。自1990年以来， 上市公司的平均僵尸企业的比例大幅上升， 2020年达到了7%左右。僵尸企业通常出现在中小企业中。经济增长、产业结构、宽松的货币政策对全球僵尸主义有很强的解释力。我们表明， 僵尸企业的存在造成市场拥堵严重， 限制了健康企业的成长。我们还发现， 全球公司债券市场的发展对僵尸企业的增长有贡献。利用交叠破产改革作为外生差异， 我们发现这些改革将僵尸比率降低了 1.4 个百分点。如果破产法变得更有利于债权人， 那么降低的幅度更为可观。如果未能恢复， 僵尸企业在宣布破产、退市或被收购之前平均可生存五年。破产改革加速了僵尸地位的消除。

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. Since the seminal work of Caballero et al. (2008), who document the congestion effects of zombie firms in Japan, a number of subsequent studies have examined the firm-level impact and macroeconomic implications of zombie firms in various countries (e.g., Acharya et al., 2019, 2020, 2022; Adalet McGowan et al., 2018; Banerjee & Hofmann, 2022; Lam et al., 2017; Schivardi et al., 2021). Those studies show that the presence of zombie firms generates credit misallocation and congestion problems and impedes real economic growth.

  2. Those studies include (but are not limited to): Adalet McGowan et al. (2017, 2018), Banerjee and Hofmann (2018, 2022), Schivardi et al. (2021), Acharya et al. (2022), Carreira et al. (2022), Favara et al. (2022), and Bonfim et al. (2023). See our Online Appendix for a detailed discussion of related studies.

  3. The \(Z^{\prime \prime }\)-score model, as proposed by Altman et al. (1995), demonstrates broad international applicability across various non-financial business sectors, notably including smaller and manufacturing firms, as evidenced in Altman et al. (2017, 2019).

  4. Although the Z-score has been proved to be a valued predictor of default, it is not perfect in predicting whether a firm will go bankrupt within 1 year or 2 years. Indeed, Altman (2018) highlights that, based on 50 years of US data, type 1 errors range from 10% to 20%, while type 2 errors are marginally higher. Importantly, using 3-year averages of Z-score and \(Z^{\prime \prime }\)-scores instead of a single year value helps us not to falsely include distressed non-zombie firms in our sample. Online Appendix shows that the fraction of distressed non-zombie firms exhibits a pro-cyclical rather than an increasing pattern – higher fraction during economic downturns such as those in 2001–2002, 2008–2009, and 2020.

  5. Broadening the sample to roughly 200 World Bank-tracked economies and maintaining observations from nations with at least 30 years of data and 50 yearly observations yields 37 economies. Untabulated statistics show that these 37 economies’ zombie fraction trend closely matches our sample’s top 20 economies.

  6. We do not refer to small firms by their market capitalization because the size of small-cap firms, as conventionally defined by popular indices such as the Russell 2000 Small-Cap Index, can be quite substantial in a global context. For example, the average (median) market capitalization of constituents in Russell 2000 is approximately $2 billion ($600 million).

  7. Adalet McGowan et al. (2017, 2018) require a firm to be at least 10 years old to be qualified as a zombie because young firms are likely to be misclassified as zombies based on interest coverage ratio. We also collected firm founding years from Compustat for U.S. firms and Worldscope for international ones. When this information was unavailable, we used Capital IQ, FactSet, and SDC’s new issuance data. Using this method, we obtained founding years for 94.4% of our sample firms. Based on their founding year, the median firm age is 30 years, with 86% having been around for over a decade. In untabulated results, the coefficients for the Fraction of young firms variable becomes statistically insignificant, showing that ‘young firms’ – those under 10 years old since incorporation – do not significantly affect the proportion of ‘zombie firms’ in our baseline regression models.

  8. The online appendix shows the global zombie ratio without newly listed firms. Figure 1 reveals that new IPOs do not affect the average zombie ratio over time, except in the early 2000s. After excluding firms under 5 or 10 years old, most results are qualitatively similar to the primary analyses of this study. The online Appendix also shows zombie firm fractions in individual economies.

  9. After dropping smaller firms, their 2019 zombie ratios drop from 28.7% and 20.78% to roughly 4%.

  10. The online appendix shows that, whereas small firms have a considerably greater zombie share than large firms, their secular trends are similar globally. The evidence indicates that the temporal pattern in Fig. 1 is not primarily caused by the small firm sample.

  11. The unconditional means of investment ratio, employment growth, and sales growth are 14.56, 5.06, and 15.35%, respectively.

  12. The 2008 financial crisis and prolonged economic recovery compelled central banks worldwide to keep interest rates low. In the US, high-yield corporate bond issuance rose from $55 billion in 2008 to $435 billion in 2020, while in Europe, it rose from $4 billion in 2008 to almost $120 billion in 2020, reports Bank of America.

  13. The correlation coefficient between annual bond issuance and zombie ratio is 74% if zombie firms are defined using the interest coverage ratio and Z-score.

  14. Despite its limitation, DealScan has been used by many prior studies on zombie firms to measure loan issuance activities (Acharya et al., 2020; Becker & Ivashina, 2022). Indeed, the absence of comprehensive alternative loan databases positions DealScan as the primary data source in corporate loan studies.

  15. Leveraged loans refer to those loans that are rated non-investment grade or those that carry spreads of 125–150 basis points over a risk-free reference rate.

  16. We do not consider the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in the United States in 2005 as the modernization of the bankruptcy code like in other countries.

  17. A few studies exploit bankruptcy reforms and the strengthening of creditor rights in some of our sample countries to study their causal effects on firm investment, innovation, and growth (e.g., Acharya and Subramanian, 2009; Acharya et al., 2011; Favara et al., 2017). More broadly, the bankruptcy law and strengthening of creditor rights have implications for corporate investments and debt contracting (Cumming & Zhang, 2023; Cumming et al., 2020; El Ghoul et al., 2020).

  18. We do not have access to a database that provides comprehensive coverage of non-US bankruptcies.

  19. A valid explanation is that the reduction in time in a firm’s zombie status is likely due to bankruptcy restructurings or liquidations. The caveats are that due to data limitations on bankruptcy filings outside of the United States, we are not able to provide empirical evidence to directly support the explanation.

  20. Acknowledging potential type 1 errors in our classification of global zombie firms (i.e., a non-zombie firm identified as a zombie firm) and other noise presented in our outcome analysis, we exclude the “recovered” subsample from regressions to focus solely on terminating cases.

References

  • Acharya, V. T., Amihud, Y., & Litov, L. (2011). Creditor rights and corporate risk-taking. Journal of Financial Economics, 102, 150–166.

    Article  Google Scholar 

  • Acharya, V. T., Crosignani, M., Eisert, T., & Eufinger, C. (2020). Zombie credit and (dis)-inflation: Evidence from Europe. Working paper, Liberty Street Economics, Federal Reserve Bank of New York.

  • Acharya, V. T., Crosignani, M., Eisert, T., & Steffen, S. (2022). Zombie lending: Theoretical, international and historical perspectives. Annual Review of Financial Economics, 14, 21–38.

    Article  Google Scholar 

  • Acharya, V. T., Eisert, T., Eufinger, C., & Hirsch, C. (2019). Whatever it takes: The real effects of unconventional monetary policy. Review of Financial Studies, 32(9), 3366–3411.

    Article  Google Scholar 

  • Acharya, V. V., & Subramanian, K. V. (2009). Bankruptcy codes and innovation. Review of Financial Studies, 22(12), 4949–4988.

    Article  Google Scholar 

  • Adalet McGowan, M., Andrews, D., & Millot, V. (2017). Insolvency regimes, zombie firms and capital reallocation. OECD Economics Department Working paper 1399.

  • Adalet McGowan, M., Andrews, D., & Millot, V. (2018). The walking dead? Zombie firms and productivity performance in OECD countries. Economic Policy, 33(96), 685–736.

    Article  Google Scholar 

  • Altman, E. I. (1968). Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. Journal of Finance, 23(4), 189–209.

    Article  Google Scholar 

  • Altman, E. I. (2018). A fifty year retrospective on credit risk models, the Altman Z-score family of models and their applications to financial markets and managerial strategies. Journal of Credit Risk, 14(4), 1–34.

    Article  Google Scholar 

  • Altman, E. I. (2021). Covid-19 and the credit cycle: 2020 revisited and 2021 outlook. Journal of Credit Risk, 17(4), 1–13.

    Article  Google Scholar 

  • Altman, E. I., Harzell, J., & Peck, M. (1995). A scoring system for emerging market corporate bonds. Salomon Brothers. Reprinted in Emerging Markets Review (No. 5, December 2005).

  • Altman, E. I., Hotchkiss, E., & Wang, W. (2019). Corporate financial distress, restructuring, and bankruptcy. Wiley.

    Book  Google Scholar 

  • Altman, E. I., Iwanicz-Drozdowska, M., Laitinen, E. K., & Suvas, A. (2017). Financial distress prediction in an international context: A review and empirical analysis of Altman’s z-score model. Journal of International Financial Management and Accounting, 28(2), 131–171.

    Article  Google Scholar 

  • Banerjee, R., & Hofmann, B. (2018). The rise of zombie firms: Causes and consequences. BIS Quarterly Review, 9, 67–78.

    Google Scholar 

  • Banerjee, R., & Hofmann, B. (2022). Corporate zombies: Anatomy and life cycle. Economic Policy, 37, 757–803.

    Article  Google Scholar 

  • Becker, B. & Ivashina, V. (2022). Corporate insolvency rules and zombie lending. American Economic Review P &P, forthcoming.

  • Becker, B., & Josephson, J. (2016). Insolvency resolution and the missing high-yield bond markets. Review of Financial Studies, 29, 2814–2849.

    Article  Google Scholar 

  • Bonfim, D., Cerqueiro, G., Degryse, H., & Ongena, S. (2023). On-site inspecting zombie lending. Management Science, forthcoming.

  • Bruche, M., & Llobet, G. (2013). Preventing zombie lending. Review of Financial Studies, 27, 923–956.

    Article  Google Scholar 

  • Caballero, R., Hoshi, T., & Kashyap, A. (2008). Zombie lending and depressed restructuring in Japan. American Economic Review, 33(4), 719–730.

    Google Scholar 

  • Carreira, C., Teixeira, P., & Nieto-Carrillo, E. (2022). Recovery and exit of zombie firms in Portugal. Small Business Economics, 59, 491–519.

    Article  Google Scholar 

  • Cumming, D., Lopez-de Silanes, F., McCahery, J. A., & Schwienbacher, A. (2020). Tranching in the syndicated loan market around the world. Journal of International Business Studies, 51, 95–120.

    Article  Google Scholar 

  • Cumming, D., & Zhang, M. (2023). Bankruptcy law and angel investors around the world. Journal of International Business Studies, 54, 1256–1277.

    Article  Google Scholar 

  • Das, S. R., Hanouna, P., & Sarin, A. (2009). Accounting-based versus market-based cross-sectional models of CDS spreads. Journal of Banking and Finance, 33(4), 719–730.

    Article  Google Scholar 

  • Davydenko, S. A., & Franks, J. R. (2008). Do bankruptcy codes matter? A study of defaults in France, Germany, and the U.K. Journal of Finance, 63(2), 565–608.

    Article  Google Scholar 

  • Djankov, S., Hart, O., McLiesh, C., & Shleifer, A. (2008). Debt enforcement around the world. Journal of Political Economy, 116(6), 1105–1149.

    Article  Google Scholar 

  • Djankov, S., McLiesh, C., & Shleifer, A. (2007). Private credit in 129 countries. Journal of Financial Economics, 85, 299–329.

    Article  Google Scholar 

  • Dou, W., Wang, W., & Wang, W. (2023). The cost of intermediary market power for distressed borrowers. Working paper, University of Pennsylvania.

  • Eckbo, B. E., Li, K., & Wang, W. (2023). Loans to Chapter 11 firms: Contract design and pricing. Journal of Law and Economics, 66, 465–509.

    Article  Google Scholar 

  • El Ghoul, S., Fu, Z., & Guedhami, O. (2021). Zombie firms: Prevalence, determinants, and corporate policies. Finance Research Letters, 41, 101876.

    Article  Google Scholar 

  • El Ghoul, S., Guedhami, O., Kwok, C. C. Y., & Zheng, Y. (2020). The role of creditor rights on capital structure and product market interactions: International evidence. Journal of International Business Studies, 52, 121–147.

    Article  Google Scholar 

  • Favara, G., Minoiu, C., & Perez-Orive, A. (2022). U.S. zombie firms: How many and how consequential? FEDS notes. Washington: Board of Governors of the Federal Reserve System.

  • Favara, G., Morellec, E., Schroth, E., & Valta, P. (2017). Debt enforcement, investment, and risk taking across countries. Journal of Financial Economics, 123, 22–41.

    Article  Google Scholar 

  • Gilson, S. C., Dessain, V., & Abbott, S. L. (2010). Groupe Eurotunnel S.A. Harvard Business School Case 9-209-062.

  • Gopalan, R., Martin, X., & Srinivasan, K. (2017). Weak creditor rights and insider opportunism: Evidence from an emerging market. Working paper, Washington University in St. Louis.

  • Gormley, T., Gupta, N., & Jha, A. (2018). Quiet life no more? Corporate bankruptcy and bank competition. Journal of Financial and Quantitative Analysis, 53(3), 581–611.

    Article  Google Scholar 

  • Hoshi, T. (2006). Economics of the living dead. Japanese Economic Review, 57(1), 30–49.

    Article  Google Scholar 

  • Hoshi, T., Kawaguchi, D., & Ueda, K. (2023). Economics of the living dead. Journal of Banking and Finance, 147, 1–17.

    Google Scholar 

  • Hotchkiss, E. S., John, K., Li, B., Ponticelli, J., & Wang, W. (2022). Default and bankruptcy resolution in China. Annual Review of Financial Economics, forthcoming.

  • Hotchkiss, E. S., & Mooradian, R. (1997). Vulture investors and the market for control of distressed firms. Journal of Financial Economics, 43, 401–432.

    Article  Google Scholar 

  • Jafarov, E. & Minnella, E. (2023). Too low for too long: Could extended periods of ultra easy monetary policy have harmful effects? IMF working paper.

  • Jiang, W., Li, K., & Wang, W. (2012). Hedge funds and Chapter 11. Journal of Finance, 67, 513–560.

    Article  Google Scholar 

  • John, K., Kaviani, M. S., Kryzanowski, L., & Maleki, H. (2020). Do country-level creditor protections affect firm-level debt structure? Working paper, New York University.

  • Jordà, O., Kornejew, M., Schularick, M., & Taylor, A. M. (2022). Zombies at large? Corporate debt overhang and the macroeconomy. Review of Financial Studies, 35(10), 4561–4586.

    Article  Google Scholar 

  • Lam, W. R., Schipke, A., Tan, Y., & Tan, Z. (2017). Resolving China’s zombies: Tackling debt and raising productivity. IMF working paper.

  • Li, B. & Pontcelli, J. (2021). Going bankrupt in China. Review of Finance, forthcoming.

  • McKinsey. (2020). The emerging resilients: Achieving “escape velocity”. McKinsey Company: Special Report.

  • Peek, J., & Rosengren, E. S. (2005). Unnatural selection: Perverse incentives and the misallocation of credit in Japan. American Economic Review, 95, 1144–1166.

    Article  Google Scholar 

  • Pontcelli, J., & Alencar, L. S. (2016). Court enforcement, bank loans, and firm investment: Evidence from a bankruptcy reform in Brazil. Quarterly Journal of Economics, 131(3), 1365–1413.

    Article  Google Scholar 

  • Rodano, G., Serrano-Velarde, N., & Tarantino, E. (2016). Bankruptcy law and bank financing. Journal of Financial Economics, 120, 363–382.

    Article  Google Scholar 

  • Schivardi, F., Sette, E., & Tabellini, G. (2021). Credit misallocation during the European financial crisis. The Economic Journal, 132, 391–423.

    Article  Google Scholar 

  • Standard Poor’s. (2011). 2010 adjusted key U.S. and European industrial and utility financial ratios. CreditStats, S&P Global Portal, Ratings Direct.

  • Vig, V. (2013). Access to collateral and corporate debt structure: Evidence from a natural experiment. Journal of Finance, 68(3), 881–928.

    Article  Google Scholar 

  • Wang, W. (2022). The costs of bankruptcy restructuring. Oxford Research Encyclopedia in Economics and Finance.

Download references

Acknowledgements

We thank Bill Megginson (editor), four anonymous referees, Viral Acharya, Patrick Augustin, Yakov Amihud, Vicente J. Bermejo, Bernard Black, Joanne Chen, Martin Fridson, Emilios Galariotis, Mike Harmon, Edith Hotchkiss, Erkki Laitinen, Harry Mamaysky, Vitaly Orlov, Ajay Patel, Andrea Resti, Marti Subrahmanyam and seminar participants at the China International Conference in Finance, Credit Scoring and Credit Rating Conference, Financial Management Association annual meetings, Financial Management Association European Conference, International Risk Management Conference, Journal of Law, Finance, and Accounting Conference, Southern Finance Association annual meetings, and World Finance Conference for their comments and suggestions.

Author information

Authors and Affiliations

  1. Leonard N. Stern School of Business, New York University, New York, USA

    Edward I. Altman

  2. Wharton Research Data Services, University of Pennsylvania, Philadelphia, USA

    Rui Dai

  3. Chinese University of Hong Kong, Shenzhen, China

    Rui Dai

  4. Smith School of Business of Queen’s University, Kingston, Canada

    Wei Wang

Authors
  1. Edward I. Altman
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rui Dai
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Wei Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Wei Wang.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Accepted by William Megginson, Area Editor, 11 January 2024. This article has been with the authors for two revisions.

Supplementary Information

Below is the link to the electronic supplementary material.

Supplementary file 1 (pdf 1785 KB)

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Altman, E.I., Dai, R. & Wang, W. Global zombie companies: measurements, determinants, and outcomes. J Int Bus Stud (2024). https://doi.org/10.1057/s41267-024-00689-4

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1057/s41267-024-00689-4

Keywords

Search

Navigation