Zombie firms, state subsidies and aggregate productivity

IF 1.6 3区 经济学 Q2 ECONOMICS Economica Pub Date : 2025-01-21 DOI:10.1111/ecca.12569
Xijie Gao
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引用次数: 0

Abstract

Using firm-level data from the manufacturing sector in China, I document that zombie firms are larger and less productive, and receive higher subsidy rates on average. The difference in subsidy rates between zombies and non-zombies reflects both the selection criteria of zombies and the underlying joint distribution of subsidy rate and productivity. I develop a model with heterogeneous firms to quantify the impact of zombies on aggregate productivity. Quantitative exercises show that while both policies—reducing subsidy dispersion and facilitating zombie exits—effectively reduce the zombie rate, the former yields greater productivity gains.

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来源期刊
Economica
Economica ECONOMICS-
CiteScore
2.40
自引率
0.00%
发文量
49
审稿时长
5 weeks
期刊介绍: Economica is an international journal devoted to research in all branches of economics. Theoretical and empirical articles are welcome from all parts of the international research community. Economica is a leading economics journal, appearing high in the published citation rankings. In addition to the main papers which make up each issue, there is an extensive review section, covering a wide range of recently published titles at all levels.
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