【Abstract】
This paper examines the financing channels for zombie firms in China. We find that equity markets and suppliers provide substantial financing support for zombie firms, while banks and other financing channels are less important. We also find that the amount of investment does not increase accordingly after zombie firms obtain external financing, which indicates an inefficient use of funds by these zombie firms. Our results are robust to various definitions of zombie firms, and also to a propensity score matching method.
【Keywords】
Zombie firms; external financing; equity market; trade credit
【Authors】
Liping Lu, School of Finance, Renmin University of China, China.
Xiaoyang Li, School of Finance, Renmin University of China, China.
Zongxin Qian, Senior Research Fellow of IMI; School of Finance, Renmin University of China, China.