Results 91 to 100 of about 203 (124)
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Should zombie lending always be prevented?
International Review of Economics and Finance, 2015It has been argued that zombie lending might have been one of the main culprits behind the sluggish Japanese recovery in the so-called “lost decade”. Among others, zombie lending may lead to misallocation of capital, reduction of profits for healthy firms, and lower employment.
exaly +2 more sources
Throwing good money after bad: Zombie lending and the supply chain contagion of firm exit
Journal of Economic Behavior and Organization, 2021Abstract This paper studies whether the bailout of downstream firms helps stop the supply chain propagation of business failure. By analyzing persistent zombie lending in China, we show that such a bailout policy does not work. Zombie lending to downstream firms does not reduce the exit likelihood of upstream firms.
Xuchao Li, Jiankun Lu, Dinghua Liu
exaly +2 more sources
Zombie Lending: Theoretical, International, and Historical Perspectives
Annual Review of Financial Economics, 2022Viral Acharya +3 more
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Bank Specialization and Zombie Lending
Management Science, 2021We study whether banks internalize congestion externalities when lending to zombie firms. We conjecture that banks should be better informed about the presence of zombie firms and the congestion externalities that such firms exert on healthy borrowers in industries where banks are specialized and show that banks’ credit supply to zombie firms relates ...
Olivier De Jonghe +2 more
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SSRN Electronic Journal, 2022
We show that U.S. banks do not engage in zombie lending to firms of deteriorating profitability, irrespective of capital levels and exposure to such firms. In contrast, unregulated financial intermediaries do, originating more and cheaper loans to these firms.
Favara, Giovanni +2 more
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We show that U.S. banks do not engage in zombie lending to firms of deteriorating profitability, irrespective of capital levels and exposure to such firms. In contrast, unregulated financial intermediaries do, originating more and cheaper loans to these firms.
Favara, Giovanni +2 more
openaire +2 more sources
Zombie Lending: Theoretical, International, and Historical Perspectives
SSRN Electronic Journal, 2021This article surveys the theory on zombie lending incentives and the consequences of zombie lending for the real economy. It also offers a historical perspective by reviewing the growing empirical evidence on zombie lending along three dimensions: ( a) the role of undercapitalized banks, ( b) effects on zombie firms, and ( c) spillovers and ...
Acharya, Viral +3 more
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Weak Corporate Insolvency Rules: The Missing Driver of Zombie Lending
AEA Papers and Proceedings, 2022“Zombie lending”--lending to less-productive firms at subsidized rates--can help banks with misaligned incentives in the short run, but it prolongs economic downturns. We propose that inefficient resolution of insolvency is a significant contributor to this problem.
Bo Becker, Victoria Ivashina
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SSRN Electronic Journal
State-owned banks increase lending to financially weak "zombie'' firms before elections. Using loan-level data over 76 elections across 36 democracies, I show that state-owned banks initiate new lending relationships with zombie firms to preserve jobs and improve electoral outcomes.
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State-owned banks increase lending to financially weak "zombie'' firms before elections. Using loan-level data over 76 elections across 36 democracies, I show that state-owned banks initiate new lending relationships with zombie firms to preserve jobs and improve electoral outcomes.
openaire +1 more source