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How Can FinTech Reduce Corporate Zombification Risk?

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  • Long Jin
  • Changchun Pan
  • Yan Li
  • Xinmiao Liu

Abstract

Based on data from China’s A-share listed companies from 2011 to 2018, in this paper, we examine the impact of FinTech on corporate zombification risk. We find that FinTech can reduce corporate zombification risk; for each unit increase in FinTech, the probability of a company becoming a zombie firm decreases by 7.8%. In addition, FinTech can reduce corporate zombification risk by improving the efficiency of bank credit and government subsidies. Furthermore, the breadth of FinTech coverage and the depth of application can reduce corporate zombification risk, but the degree of digitization fails to play a role. Finally, not only can FinTech reduce corporate zombification risk, but it can also inhibit the contagion effect of zombie firms in the industry.

Suggested Citation

  • Long Jin & Changchun Pan & Yan Li & Xinmiao Liu, 2022. "How Can FinTech Reduce Corporate Zombification Risk?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(15), pages 4350-4360, December.
    • Handle: RePEc:mes:emfitr:v:58:y:2022:i:15:p:4350-4360
    DOI: 10.1080/1540496X.2022.2078698
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    Cited by:

    1. Yingkai Yin & Hongxin Ma & Zhenni Wu & Aobo Yue, 2023. "How Does China Build Its Fintech Strategy? A Perspective of Policy Evolution," Sustainability, MDPI, vol. 15(13), pages 1-21, June.

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