Zombie firms, state subsidies and aggregate productivity
Bibliographic Data
| ID | 9723662 |
|---|---|
| Authors | Xijie Gao (0000-0002-0602-4690, Nanyang Technological University, corresponding author) |
| Year | 2025 |
| Volume | 92 |
| Issue | 366 |
| Pages | 507-547 |
| Publication date | 2025-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12569 |
| OpenAlex | W4406682056 |
| Language | EN |
| References cited | 36 |
Using firm‐level data from the manufacturing sector in China, I document that zombie firms are larger and less productive, and receive higher subsidy rates on average. The difference in subsidy rates between zombies and non‐zombies reflects both the selection criteria of zombies and the underlying joint distribution of subsidy rate and productivity. I develop a model with heterogeneous firms to quantify the impact of zombies on aggregate productivity. Quantitative exercises show that while both policies—reducing subsidy dispersion and facilitating zombie exits—effectively reduce the zombie rate, the former yields greater productivity gains
Aggregate (composite) · Business · Computer security · Economics · Macroeconomics · Market economy · Productivity · Subsidy · Zombie · Computer Science · Corporate Finance and Governance · Firm Innovation and Growth · Global trade and economics
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Misallocation and Manufacturing TFP in China and India
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Competition and Corporate Tax Avoidance
| Citation velocity | historical |
|---|---|
| Highly cited | No |