Living with Zombie Companies: Do we Know Where the Threat Lies?

Sara Urionabarrenetxea, Jose Domingo Garcia-Merino, Leire San-Jose, Jose Luis Retolaza

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

This paper shows the existence of extreme types of zombie firm, i.e. companies with negative equity that continue to do business despite having lost their entire equity. We explain how these firms are measured and how the riskier ones are defined with different determinants. Using a Spanish sample from 2010 to 2014 an index called the EZIndex is developed that includes four dimensions of the extreme zombie problem: extension, contagion, recovery signs and immediacy. The paper contributes to zombie theory on the one hand by developing a method for ranking zombie firms based on risks and changes over time, and on the other hand by using a log-linear model to detect the riskiest corporate profiles out of all these risky firms. It demonstrates significant implications that need to be considered by the competent authorities not only in terms of their impact as a whole but also in regard to the particular profile of extreme zombie firms: they are less regulated, large and located in regions with large business fabrics.
LanguageEnglish
Pages408-420
Number of pages13
JournalEuropean Management Journal
Volume36
Issue number3
Early online date10 Jun 2017
DOIs
Publication statusPublished - Jun 2018
Externally publishedYes

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Threat
Equity
Authority
Ranking
Log-linear models
Contagion

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Urionabarrenetxea, S., Garcia-Merino, J. D., San-Jose, L., & Retolaza, J. L. (2018). Living with Zombie Companies: Do we Know Where the Threat Lies? European Management Journal, 36(3), 408-420. https://doi.org/10.1016/j.emj.2017.05.005
Urionabarrenetxea, Sara ; Garcia-Merino, Jose Domingo ; San-Jose, Leire ; Retolaza, Jose Luis. / Living with Zombie Companies : Do we Know Where the Threat Lies?. In: European Management Journal. 2018 ; Vol. 36, No. 3. pp. 408-420.
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Urionabarrenetxea, S, Garcia-Merino, JD, San-Jose, L & Retolaza, JL 2018, 'Living with Zombie Companies: Do we Know Where the Threat Lies?', European Management Journal, vol. 36, no. 3, pp. 408-420. https://doi.org/10.1016/j.emj.2017.05.005

Living with Zombie Companies : Do we Know Where the Threat Lies? / Urionabarrenetxea, Sara; Garcia-Merino, Jose Domingo; San-Jose, Leire; Retolaza, Jose Luis.

In: European Management Journal, Vol. 36, No. 3, 06.2018, p. 408-420.

Research output: Contribution to journalArticle

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Urionabarrenetxea S, Garcia-Merino JD, San-Jose L, Retolaza JL. Living with Zombie Companies: Do we Know Where the Threat Lies? European Management Journal. 2018 Jun;36(3):408-420. https://doi.org/10.1016/j.emj.2017.05.005