Credit Access and Zombie Firms

A Study on State-Owned, Private, and Foreign-Invested Firms in A Transition Economy

Bibliographic Data

ID21475376
AuthorsNam Hoang Vu (0000-0003-3491-0435, Foreign Trade University, corresponding author), Linh Hai Bui (Foreign Trade University), Tam Tran (0000-0002-2433-0077, Foreign Trade University), Tam Minh Tran (Foreign Trade University), Huong Thanh Ha (Foreign Trade University), Lam Dang Nguyen (0000-0002-1818-1642, Bloomsburg University)
Year2023
Volume46
Issue12
Pages833-846
Publication date2023-09-10
Open AccessNo
TypeARTICLE
VenueInternational Journal of Public Administration (JOURNAL)
Journal identifiersISSN: 0190-0692 • E-ISSN: 1532-4265
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/01900692.2022.2025830
OpenAlexW4210256375
LanguageEN
References cited59

The existence of zombie firms is one of the more notable problems in many transition economies since these companies can hamper sustainable economic development. This paper examines the impact of credit access on the existence and recovery of zombie firms. Using a comprehensive dataset comprising a large number of firms operating in Vietnam during the period from 2006 to 2015, we find that having access to credit reduces the likelihood that a firm is a zombie. We also find that credit access is only useful for firms to escape from being zombies up to a certain threshold. While access to credit reduces the likelihood of private domestic firms being zombies, the study finds that it has no significant effect on state-owned and foreign invested firms. Moreover, the impact of credit access is only detected when firms borrow from formal sources of credit

Business · Computer security · Economics · Financial system · Market economy · Monetary economics · State owned · Zombie · Corporate Finance and Governance · Firm Innovation and Growth · Working Capital and Financial Performance · Finance

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