Can government funding revive zombie enterprises? Evidence from listed Chinese manufacturing enterprises

    Yudi Yang Affiliation
    ; Yong Qi Affiliation
    ; Shuo Yang Affiliation


This study tests how different types of government funding affect the recovery of zombie enterprises in the manufacturing sector of China. The results show that funding for production and innovation can revive zombie enterprises in expanding industries, while funding for interest cannot. Furthermore, funding for production and innovation can share costs, increase investment in selling or innovation, and promote the scaling down of businesses through external governance effects, helping zombie enterprises to recover. Finally, none of the funding types can revive zombie enterprises in contracting industries; these can recover only through access to larger overseas markets.

Keyword : government funding, zombie enterprises, recovery mechanism, industry life cycle, Chinese economy, transformation and upgrading

How to Cite
Yang, Y., Qi, Y., & Yang, S. (2021). Can government funding revive zombie enterprises? Evidence from listed Chinese manufacturing enterprises. Journal of Business Economics and Management, 22(6), 1633-1654.
Published in Issue
Nov 19, 2021
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This work is licensed under a Creative Commons Attribution 4.0 International License.


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