Open AccessThe impact of zombie companies on the performance of healthy companies and economies in selected countries of Central and Eastern Europe
Author(s) -
Marija Logarušić,
Irena Raguž Krištić
Publication year - 2022
Publication title -
ekonomski pregled
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.134
H-Index - 9
eISSN - 1848-9494
pISSN - 0424-7558
DOI - 10.32910/ep.73.2.1
Subject(s) - zombie , productivity , business , panel data , profit (economics) , economy , monetary economics , economics , economic growth , computer security , computer science , econometrics , microeconomics
The main goal of this paper is to analyze the impact of zombie companies on theperformance of healthy companies, economies, and economic sentiment (ESI) inselected countries of Central and Eastern Europe between 2008 and 2016. Zombie companies are companies whose sustainability is uncertain and whose competitiveness is very limited, and such companies can potentially transfer losses to the companies they are associated with. In this paper, they are defined ascompanies with negative return on assets, negative net investments and interestrates coverage below 1.5. The results of the panel model with fixed effectsshow that the market congestion by zombie companies has a negative effect onproductivity and profit per employee, a positive impact on investments and noimpact on employment growth of healthy companies. Dynamic panel model resultssuggest that market congestion by zombie companies does not have a significantimpact on the GDP of selected countries of Central and Eastern Europe whilethere is a positive relation with ESI. By analyzing the zombie companies issuein the Central and Eastern Europe countries, and their impact on ESI in generalthis paper contributes to the existing body of literature.