Zombie companies and the Covid-19 crisis: the case of Europe

• Autor(a) principal: Lampis, Nicola
• Data de Publicação: 2021
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/127270
• topic: Zombie companies; Zombie lending; Productivity; Bankruptcy; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This research examines the zombification phenomenon that characterises Europe. I find that from the Great Financial Crisis, zombie share using all three zombies’ definitions has increased together with their probability of surviving. I observe that zombie companies tend to be of small size and exhibit low growth and profitability figures. Breakdown of zombies by countries and industries signal that zombie share is higher for countries that suffered the most from the Sovereign Debt Crisis and in those industries that are sensitive to adverse shocks. Banks’ profitability helps to understand the increase number of zombie companies in Europe. When addressing the possible wave of European bankruptcies, I explain how policy makers’ intervention to limit the damage caused by the Covid-19 crisis, is likely to create new zombies.