Research On The Relationship Between Financialization Of Entity Enterprises And Zombie Firms

At present,China's economy is in a complicated stage of development.In the face of mounting downward economic pressure,the problem of overcapacity is becoming more and more serious.And the existence of zombie firms is one of the important reasons for it.An in-depth study on the causes of the formation of zombie firms will not only help to control the problem,but also can prevent normal enterprises from evolving into zombie firms,which is of great significance to promote the transformation and upgrading of economic structure in China.Based on the above background,this paper takes the structural imbalance between the real economy and the virtual economy as a breakthrough point,and analyses the causes of zombie firms from a new perspective of the financialization of entity enterprises.Firstly,this paper combs the characteristics,causes,impacts of zombie firms and economic consequences caused by the financialization of entity enterprises.Then this paper analyses the general situation of zombie firms in China and the phenomenon of zombie firms in ST companies,and makes a theoretical analysis of the mechanism of enterprises' financialization affecting the formation of zombie firms.Afterwards,based on the empirical data of ST companies from 2008 to 2018,this paper identifies the zombie enterprises and tests the hypotheses of this study.On the basis of basic regression,this paper further explores the heterogeneity of the impact of entity enterprise financialization on the formation of zombie firms from two aspects: the nature of property rights of enterprises and the degree of marketization in their respective regions.The research finds that financialization of entity enterprises increases the risk of becoming zombie firms.Furthermore,the financialization of state-owned enterprises makes them more likely to become zombie firms;compared with low marketization areas,companies in the area with higher market-based degree are relatively less likely to become zombie firms due to excessive financialization.Finally,according to the conclusions of this study,the relevant policy recommendations are put forward from the aspects of enterprise,government and external market environment.This paper enriches the study of the causes for zombie phenomenon and expands understanding of the influence of financialization to a certain extent.In the end,this paper also provides some reference for preventing the formation of zombie firms.