Abstract
Zombie firms, which are financially unsustainable, unable to pay their debts, and continue to survive face issues such as low profit margins, high debt burdens, and weak cash flows. In this context, the aim of this study is to examine the characteristics of these zombie companies, which Are not often adressed in the literature, and to evaluate their roles and impacts on the economic system. To achieve this aim, existing literature on zombie firms in both the world and Turkey has been reviewed, and a case study of a sample company has been analyzed to derive findings.According to the findings, zombie firms are characterized by high debt levels, negative profit profiles, high debt-to-equity ratios, elevated financial risks, and threats to their financial sustainability. It is observed that such companies also face high production costs and incur losses from their operations. Furthermore, the presence of zombie firms tends to increase during economic downturns, reinforced by low interest rates and government support. The findings indicate that zombie companies struggle to adapt to market dynamics and competitive conditions, remaining distant from innovation.Finally, the results of the study provide significant recommendations for both investors and policymakers.
Published Version
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