Bank Specialization and Zombie Lending

Jonghe, Olivier De; Mulier, Klaas; Samarin, Ilia

doi:10.2139/ssrn.3923576

Cited by 2 publications

(2 citation statements)

References 56 publications

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“…SME has a mean of 0.956. 7 Zombie is a dummy variable indicating whether a firm is a zombie firm according to the definition of De Jonghe, Mulier and Samarin (2021). This definition starts from a firm's cash flow, measured as EBITDA plus recurring financial revenues such as dividends, to focus on the cash flow that is actually available to pay interest.…”

Section: Other Datamentioning

confidence: 99%

“…SME is a dummy variable indicating firms with fewer than 250 employees and with total assets less than €50 million. Zombie is a dummy variable indicating that a firm is a zombie firm based on the definition of de Jonghe, Mulier and Samarin (2021). Zombie industry is the fraction of zombie firms in an industry in a given year in a given country where firms are labeled as zombies based on their interest coverage ratios.…”

Section: Table 2 Descriptive Statisticsmentioning

confidence: 99%

See 1 more Smart Citation

Loan Recoveries and the Financing of Zombie Firms Over the Business Cycle

Demirgüç-Kunt,

Horváth,

Huizinga

2024

Preprint

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Section: Other Datamentioning

confidence: 99%

Section: Table 2 Descriptive Statisticsmentioning

confidence: 99%

Loan Recoveries and the Financing of Zombie Firms Over the Business Cycle

Demirgüç-Kunt,

Horváth,

Huizinga

2024

Preprint

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Escaping Zombiness: Does Corporate Governance Have the Elixir of Life?

Rodríguez‐Sanz,

Vallelado,

Velasco

2024

British J of Management

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This study investigates the influence of corporate governance on firms’ transition into and out of zombiness. We underscore the beneficial role of external members in the corporate governance structure and long‐tenured chief executive officers (CEOs) in facilitating access to the external resources that firms need to be successful. Using a sample of European listed firms over the period 2008–2018, we adopt a dynamic view of zombiness by identifying shifts in the state from zombie to non‐zombie and vice versa. The results show that board independence is a twofold panacea against zombies, prompting zombie recovery and preventing healthy firms from becoming zombies. By contrast, leadership independence, materialized by separating the CEO and chairperson roles, hampers the recovery of zombies, probably because the cost of lacking unified leadership may exceed the benefits of external dependence minimization. Finally, the results suggest that longer CEO tenure helps healthy firms avoid zombiness. When considering a broader array of stakeholders, government bailout programmes impair zombie recovery, and stronger trade unions help healthy firms escape zombiness. Overall, this study brings a ray of hope to the zombie problem and provides a better appraisal of when supporting zombies might be worthwhile vis‐à‐vis saving promising firms and bringing them back to life.

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Bank Specialization and Zombie Lending

Cited by 2 publications

References 56 publications

Loan Recoveries and the Financing of Zombie Firms Over the Business Cycle

Loan Recoveries and the Financing of Zombie Firms Over the Business Cycle

Escaping Zombiness: Does Corporate Governance Have the Elixir of Life?

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