They are in Europe and USA, but probably in other countries, as well. They are delete for elaborating quantitive financial and economical models, then, their existence is not taken into account for many strategical decision. We should be worry!
It can create a biased results, so that quantitative analysis or econometric models are necessary but critical, it can be different from case to another.
You are right. There are plenty of zombie-companies and for econometric analysis no availability of data.
Probably they exist however I wouldn't that in the US many small and medium size businesses that are privately owned have negative equity but a positive cash flow where non cash expenses reduce equity.
Yes. Using firm-level data covering 14 advanced economies and spanning three decades, we identify zombie companies based on (i) their persistent lack of profitability, i.e. profits insufficient to cover interest payments on debt (interest coverage ratio below one);
- Badges
- Science topic
- Similar topics
- Geoscience
- Asia
- India