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Zombie-Lending in the United States -- Prevalence versus Relevance

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  • Maximilian Gobel
  • Nuno Tavares

Abstract

Extraordinary fiscal and monetary interventions in response to the COVID-19 pandemic have revived concerns about zombie prevalence in advanced economies. Within a sample of publicly listed U.S. companies, we find zombie prevalence and zombie-lending not to be a widespread phenomenon per se. Nevertheless, our results reveal negative spillovers of zombie-lending on productivity, capital-growth, and employment-growth of non-zombies as well as on overall business dynamism. It is predominantly the class of healthy small- and medium-sized companies that is sensitive to zombie-lending activities, with financial constraints further amplifying these effects.

Suggested Citation

  • Maximilian Gobel & Nuno Tavares, 2022. "Zombie-Lending in the United States -- Prevalence versus Relevance," Papers 2201.10524, arXiv.org, revised Jul 2022.
    • Handle: RePEc:arx:papers:2201.10524
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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