Cover Image
Read Now

The Walking Dead? Zombie Firms and Productivity Performance in OECD Countries

This paper explores the extent to which "zombie" firms - defined as old firms that have persistent problems meeting their interest payments - are stifling labour productivity performance. The results show that the prevalence of and resources sunk in zombie firms have risen since the mid-20...

Full description

Bibliographic Details
Main Author: Adalet McGowan, Müge
Other Authors: Andrews, Dan, Millot, Valentine
Format: eBook
Language:English
Published: Paris OECD Publishing 2017
Series:OECD Economics Department Working Papers
Subjects:
Economics
Industry And Services
Online Access:
Collection: OECD Books and Papers - Collection details see MPG.ReNa
LEADER 02242nma a2200289 u 4500
001 EB001830288
003 EBX01000000000000000996734
005 00000000000000.0
007 cr|||||||||||||||||||||
008 180616 ||| eng
100 1 |a Adalet McGowan, Müge 
245 0 0 |a The Walking Dead?  |h Elektronische Ressource  |b Zombie Firms and Productivity Performance in OECD Countries  |c Müge, Adalet McGowan, Dan, Andrews and Valentine, Millot 
246 2 1 |a Les Morts-Vivants ? : Entreprises Zombies et Productivité dans les Pays de l'OCDE / Müge, Adalet McGowan, Dan, Andrews et Valentine, Millot 
246 3 1 |a Les Morts-Vivants ? 
260 |a Paris  |b OECD Publishing  |c 2017 
300 |a 45 p 
653 |a Economics 
653 |a Industry and Services 
700 1 |a Andrews, Dan 
700 1 |a Millot, Valentine 
041 0 7 |a eng  |2 ISO 639-2 
989 |b OECD  |a OECD Books and Papers 
490 0 |a OECD Economics Department Working Papers 
028 5 0 |a 10.1787/180d80ad-en 
856 4 0 |a oecd-ilibrary.org  |u https://doi.org/10.1787/180d80ad-en  |x Verlag  |3 Volltext 
082 0 |a 330 
520 |a This paper explores the extent to which "zombie" firms - defined as old firms that have persistent problems meeting their interest payments - are stifling labour productivity performance. The results show that the prevalence of and resources sunk in zombie firms have risen since the mid-2000s and that the increasing survival of these low productivity firms at the margins of exit congests markets and constrains the growth of more productive firms. Controlling for cyclical effects, cross-country analysis shows that within-industries over the period 2003-2013, a higher share of industry capital sunk in zombie firms is associated with lower investment and employment growth of the typical non-zombie firm and less productivity-enhancing capital reallocation. Besides limiting the expansion possibilities of healthy incumbent firms, market congestion generated by zombie firms can also create barriers to entry and constrain the post-entry growth of young firms. Finally, we link the rise of zombie firms to the decline in OECD potential output growth through two key channels: business investment and multi-factor productivity growth 

Similar Items