Reviving the working dead: The revival of zombie companies among listed firms in China

Crawford School of Public Policy
Photo by DukeAnt on Wikimedia Commons

Event details

PhD Seminar (Econ)

Date & time

Friday 19 March 2021




Joel Bowman

A high proportion of zombie firms are revived (i.e. return to non-zombie status) among listed companies in China, which raises the question on whether the zombie problem is an illusion driven by transitory factors or whether there are longer-term consequences with zombification. This paper analyses the firm-level dynamics of revived zombie companies to identify factors that help revive zombie companies and to assess how their characteristics evolve after they recover. The probability that a zombie company becomes a viable firm again is higher for those that have undertaken major restructurings, lower levels of leverage, smaller operating expense ratios and higher ownership stakes by major shareholders. Revived zombie firms continue to have lower levels of profitability and have a higher probability of relapsing into a zombie status again compared with firms that have never been zombies.

Updated:  10 May 2021/Responsible Officer:  Crawford Engagement/Page Contact:  CAP Web Team