"Why Do 'Zombie Companies' Remain 'Undead'?"

Abstract

"Zombie companies" have long been a significant problem troubling the economic development and social progress of our country. Based on this issue, this project aims to explore the social impact factors of "zombie companies" and support enterprises to "de-zombify" to facilitate the rational and effective allocation of market resources. The discussion unfolds from theoretical, practical, mechanism, and policy levels consecutively. By exploring the intrinsic logical relationship between "zombie companies" and the market, we analyze reasonable mechanisms that can enable the effective exit of zombie companies, which aligns with the orderly operation of the market under modern economic conditions. This is conducive to the theoretical logic of facilitating the domestic circulation and achieving a virtuous cycle of industrial capital and financial capital. At the same time, it reveals potential internal issues within enterprises, such as lack of initiative, irrational allocation of resources, repayment of financial debts, etc., and proposes relevant policy recommendations for these issues, laying a solid foundation for the long-term development of enterprises and the market.