The Debt Financing Crowding-out Effect Of Zombie Firms

As China's economy enters the "three-phase superposition" phase,new and old growth kinetic energy is converted,economic downward pressure is increasing,excess capacity and structural high leverage are becoming increasingly prominent.To achieve high-quality development,the central government proposes supply-side structural reforms and vigorously promotes with the "three go,one drop and one supplement" policy,zombie firms have become an important starting point for eliminating excess capacity.Zombie firms refer to enterprises that have sustained actual losses and high debt ratios but can continue to obtain financing from outside.They are mostly distributed in industries with lagging and excess capacity,such as capital-intensive and labor-intensive industries,which are the focus of capacity reduction and deleveraging.Zombie firms are responsible for political and economic functions such as local employment,tax payment and social stability,and owe huge bank stock debts,which are related to the health and stability of the banking system.Once bankruptcy may lead to a large number of labor unemployment and banking crisis,so the government and banks have motivated to intervene in enterprise development and resource allocation,help and rescue zombie firms,and squeeze out non-zombie firms when economic resources are limited.From the perspective of credit resource allocation,there is widespread credit rationing and credit discrimination in the indirect financial system dominated by state-owned banks in China.The corporate sector levers are mainly concentrated on large-scale and state-owned enterprises,showing structural high levers.Rescue zombie firms is an inefficient resource allocation,which will affect the development of more efficient financing of non-zombie firms.Therefore,the negative externalities of zombie firms are studied from the perspective of corporate finance,and the resource mismatch in China's economic system is recognized from the perspective of zombie firms.It is very important to correctly analyze the deep-seated reasons for the current economic growth rate decline and find ways to improve the quality of economic development.This article focuses on investigating the impact of zombie firms on the efficiency of financial resource allocation.Based on the long-term use of the banking system as the main financing channel in China 's financial market,and the low proportion of nonfinancial listed companies 'bond financing,the scale of bank loans,debt financing costs,and commercial credit substitution Analyze from the perspective of sexual financing,that is,analyze the crowding-out effect around the scale,cost and structure of debt financing.Using panel data regression,we found that the regression coefficient of the non-zombie firms bank loan scale to the annual zombie ratio is negative,the regression coefficient of the non-zombie firms debt financing cost to the annual zombie ratio is positive,and the regression coefficient of the non-zombie firms business credit scale to the annual zombie ratio is positive.And the regression coefficients are economically and statistically significant.After considering the endogenous problems that may be caused by missing variables,and the deviation of the zombie firms measurement,it is still significant,indicating that the conclusion of this article is relatively stable,confirming that the zombie firms squeezes out the bank credit of the non-zombie firms,and raises the debt financing cost of the non-zombie firms.Forcing non-zombie companies to switch to higher-priced alternative commercial credits,and this crowdingout effect still has a difference in scale and ownership,that is,the smaller the scale of the enterprise,the more severe the debt squeeze out of the zombie firms debt financing;compared to state-owned enterprises,private enterprises being squeezed out more,this makes small and medium-sized private enterprises that are already in a disadvantaged position in financing more difficult,exacerbates the distortion of financial resource allocation,maks financial services for the real economy not conducive,deteriorates the efficiency of resource allocation,accumulates financial system risks,and threatens macroeconomic health and stability,drags down overall economic efficiency.With the downward pressure of the new normal economy underscoring,excess capacity and deleveraging,it is particularly important to clean up zombies steadily and effectively.