An Investigation of the Zombie Firms on Zimbabwe Stock Exchange in the Fourth Industrial Revolution

In a post-COVID-19 era, the issue of underperformance and unproductive firms is gaining momentum in the corporate world. This implies that business resilience, continuity, and transformation are at the center of economic sustenance in the Fourth Industrial Revolution. Interestingly, the COVID-19 pandemic has augmented the adoption of the “new normal” whereby companies migrated to online business supported by the Fourth Industrial Revolution. Even though business resilience, continuity, and transformation are topical issues in both developed and developing countries, it is troublesome to observe that the issue of zombie firms has been largely neglected in the post-COVID-19 epoch, especially in the context of African economies. Therefore, this study aims to investigate the zombie firms on the Zimbabwe Stock Exchange in the current Fourth Industrial Revolution. The results revealed five negative effects of zombie firms, namely, weakening economic status of the country, increasing dumping of foreign products, allocative inefficiency, widening social inequality gap, and fostering zombie lending. These results have strong implications for policymakers when formulating business rehabilitation policies, and for turnaround strategies when conducting corporate rescue as well as for financial institutions when dealing with zombie lending. It is concluded that an in-depth understanding of zombie firms listed on ZSE can assist in promoting economic resilience in Zimbabwe.