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The impact of mixed-ownership reform on zombie firms: Evidence from Chinese listed SOEs

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  • Yufei Yin
  • Kexin Cao

Abstract

Clearing out zombie firms is a critical challenge for both developed and developing countries. This article draws upon data from Chinese listed SOEs to examine the impact of mixed-ownership reform on zombie firms. The findings indicate that non-state-owned shareholders participating in mixed-ownership reform by appointing directors can help reduce the possibility of SOEs becoming zombie firms, while participating in mixed-ownership reform through shareholding is not significant. Moreover, the impact of mixed-ownership reform on zombie firms is more pronounced for firms in competitive industries and firms located in the eastern region of China. Mechanism analysis reveals that the reduction of inefficient investment has a positive mediating effect between mixed-ownership reform and zombie firms.

Suggested Citation

  • Yufei Yin & Kexin Cao, 2024. "The impact of mixed-ownership reform on zombie firms: Evidence from Chinese listed SOEs," PLOS ONE, Public Library of Science, vol. 19(7), pages 1-19, July.
    • Handle: RePEc:plo:pone00:0301048
    DOI: 10.1371/journal.pone.0301048
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    References listed on IDEAS

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    3. Carlos Carreira & Paulino Teixeira & Ernesto Nieto-Carrillo, 2022. "Recovery and exit of zombie firms in Portugal," Small Business Economics, Springer, vol. 59(2), pages 491-519, August.
    4. Leire San-Jose & Sara Urionabarrenetxea & Jose-Domingo García-Merino, 2022. "Zombie firms and corporate governance: What room for maneuver do companies have to avoid becoming zombies?," Review of Managerial Science, Springer, vol. 16(3), pages 835-862, April.
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