Zombie Companies in Business Environment in Emerging Economies: Case of Turkey

Abstract

World economies are becoming more competitive and more focused on survival with increasing demand caused by huge increase in population of the world and changing conditions such as widespread use of technology, globalization, changes in consumer behaviour i.e. The emerging competitive environment also causes the formation of zombie companies. Zombie companies have low profits, high dependence on banks and high debt to total assets ratio. Especially with the sudden disruptions that occur in the world, such as COVID-19 pandemic, the bankruptcy of the companies is postponed and the number of zombie companies is increasing, especially in emerging economies. However, by considering the researches, it has not been revealed precisely by which factors the companies turned into zombie companies. In line with this reason, this study will be specified weighted the reasons why companies turn into zombie companies in emerging economies and as a case study, with the SWARA method, will weighted these factors for an emerging economy. These factors, which are listed based on the literature review, give an overview for emerging economies, and each country will be able to create an order of importance based on its own data in line with its own characteristics. This study is expected to be the initial stage for policy makers.