Shadows of economic policy uncertainty: exploring the debt-distress nexus in zombie firms

Muhammad Adil; Iqra Shabbir; Rana Yassir Hussain; Noor Ul Ain; Shabana Nasir; Kiran Shehzadi

doi:10.5585/2025.29109

Autores

Muhammad Adil UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan https://orcid.org/0009-0000-2212-4889
Iqra Shabbir UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan https://orcid.org/0009-0007-2642-0475
Rana Yassir Hussain UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan https://orcid.org/0000-0002-6951-1322
Noor Ul Ain UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan https://orcid.org/0009-0000-9808-422X
Shabana Nasir UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan https://orcid.org/0009-0007-1929-2452
Kiran Shehzadi UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan https://orcid.org/0009-0007-4531-3472

DOI:

https://doi.org/10.5585/2025.29109

Palavras-chave:

empresas zumbis, dificuldades financeiras, financiamento da dívida, incerteza da política econômica

Resumo

As empresas zumbis persistem em uma economia, independentemente de sua falta de lucratividade. Essas empresas conseguem existir devido a empréstimos contínuos, o que levanta a questão de saber se o financiamento da dívida é sustentável para sua sobrevivência. Assim, neste estudo, tentamos investigar o papel do financiamento da dívida (DF) na dificuldade financeira (DF) de empresas zumbis. Contamos com os dados do painel em nível de empresa de empresas zumbis paquistanesas de 2020 a 2024 para atingir os objetivos da pesquisa. Os resultados obtidos por meio de abordagens de regressão de erro padrão corrigido por painel (PCSE) e estimadores de mínimos quadrados generalizados viáveis (FGLS) confirmaram que o financiamento da dívida agrava o sofrimento financeiro das empresas zumbis. Além disso, o papel moderador da incerteza da política econômica (EPU) é significativamente negativo. Os resultados revelaram que a EPU aumenta a dificuldade financeira das empresas zumbis. Em relação às recomendações de políticas, a administração de empresas zumbis deve reduzir sua dependência do DF e mudar para opções alternativas de financiamento. Os formuladores de políticas precisam lidar com as práticas de dívida insustentáveis de empresas zumbis e a instabilidade nas políticas econômicas.

Downloads

Não há dados estatísticos.

Biografia do Autor

Muhammad Adil, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Mr. Muhammad Adil is a student pursuing his MS in Management Sciences at UE Business School. Till now he has published 3 WOS indexed articles and possess deep understanding and potential in the corporate finance research.

Iqra Shabbir, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Ms Iqra Shabbir is a business graduate. She recently completed her Bachelors in Business Administration at UE Business School. She is willing to continue her higher studies in the area of corporate finance.

Rana Yassir Hussain, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Dr. Rana Yassir Hussain is serving as an assistant professor at UE Business School. He has and academic experience of 18 years and has published over 70 research papers in various national and international well reputed journals. He is also written several book chapters and edited a book. Currently, he has joined the editorial board of Discover Global Society and Frontiers of Finance. He is a seasoned research supervisor for masters and PhD students.

Noor Ul Ain, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Ms Noor Ul Ain is a business graduate. She recently completed her Bachelors in Business Administration at UE Business School. She is willing to continue her higher studies in the area of corporate finance.

Shabana Nasir, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Ms Shabana Nasir is a business graduate. She recently completed her Bachelors in Business Administration at UE Business School. She is willing to continue her higher studies in the area of corporate finance.

Kiran Shehzadi , UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Ms Kiran Shehzadi is a business graduate. She recently completed her Bachelors in Business Administration at UE Business School. She is willing to continue her higher studies in the area of corporate finance.

Referências

Abbas, M., Yang, L., & Lahr, M. L. (2024). Globalization’s effects on South Asia’s carbon emissions, 1996–2019: a multidimensional panel data perspective via FGLS. Humanities and Social Sciences Communications, 11(1), 1–19. https://doi.org/10.1057/s41599-024-03704-z

Abubakar, M. (2024). Capital Structure and Financial Performance of Listed Consumer Goods Companies in Nigeria. International Research Journal of Economics and Management Studies IRJEMS, 3(7). https://irjems.org/irjems-v3i7p150.html

Acharya, V. V., Eisert, T., Eufinger, C., & Hirsch, C. (2019). Whatever It Takes: The Real Effects of Unconventional Monetary Policy. The Review of Financial Studies, 32(9), 3366–3411. https://doi.org/10.1093/rfs/hhz005

Adil, M., Hussain, R. Y., Rassas, A. H. A., Hussain, H., & Irshad, H. (2025). Assessing the impact of economic policy uncertainty on corporate leverage structure: do foreign ownership act as buffer? Cogent Economics & Finance, 13(1), 2476100. https://doi.org/10.1080/23322039.2025.2476100

Altman, E. I. (2005). An emerging market credit scoring system for corporate bonds. Emerging Markets Review, 6(4), 311–323. https://doi.org/10.1016/j.ememar.2005.09.007

Altman, E. I., Dai, R., & Wang, W. (2021). Global Zombie Companies. Available at SSRN 3970332. https://doi.org/10.2139/ssrn.3970332

Altman, E. I., & Hotchkiss, E. (2019). Corporate financial distress, restructuring, and bankruptcy: analyze leveraged finance, distressed debt, and bankruptcy. John Wiley & Sons.

Altman, E. I., Dai, R., & Wang, W. (2024). Global zombie companies: measurements, determinants, and outcomes. Journal of International Business Studies, 55(6), 723–744. https://doi.org/10.1057/s41267-024-00689-4

Athari, S. A., & Bahreini, M. (2023). Does economic policy uncertainty impact firms’ capital structure policy? Evidence from Western European economies. Environmental Science and Pollution Research, 30(13), 37157–37173. https://doi.org/10.1007/s11356-022-24846-0

Banerjee, R., & Hofmann, B. (2022). Corporate zombies: Anatomy and life cycle. Economic Policy, 37(112), 757–803. https://doi.org/10.1093/epolic/eiac027

Banerjee, R., Doerr, S., & Hofmann, B. (2024). Whither the Walking Dead? The Consequences of Artificial Intelligence for Zombie Firms. The Economists’ Voice, 21(2), 237–248. https://doi.org/10.1515/ev-2024-0061

Beck, N., & Katz, J. N. (1995). What To Do (and Not to Do) with Time-Series Cross-Section Data. American Political Science Review, 89(3), 634–647. https://doi.org/10.2307/2082979

Blažková, I., & Chmelíková, G. (2022a). Zombie Firms during and after Crisis. Journal of Risk and Financial Management, 15(7), 301. https://doi.org/10.3390/jrfm15070301

Blažková, I., & Chmelíková, G. (2022b). Zombie Firms during and after Crisis. Journal of Risk and Financial Management, 15(7), 301. https://doi.org/10.3390/jrfm15070301

Blažková, I., & Dvouletý, O. (2020). Zombies: Who are they and how do firms become zombies? Journal of Small Business Management, 60(1), 119–145. https://doi.org/10.1080/00472778.2019.1696100

Campello, M., & Schneider, K. (2024). Uncertainty Creates Zombie Firms: Implications for Industry Dynamics and Creative Destruction *.

Carreira, C., & Lopes, J. (2022). The Role of Different Types of Creditors on Zombie Firm Creation. Notas Económicas, 55, 129–140. https://doi.org/10.14195/2183-203x_55_6

Carreira, C., Teixeira, P., & Nieto-Carrillo, E. (2021). Recovery and exit of zombie firms in Portugal. Small Business Economics, 59(2), 491–519. https://doi.org/10.1007/s11187-021-00483-8

Choudhary, M., & Ali, W. (2020). Munich Personal RePEc Archive Measuring Economic Policy Uncertainty in Pakistan.

Cole, R. A., & Sokolyk, T. (2018). Debt financing, survival, and growth of start-up firms. Journal of Corporate Finance, 50, 609–625. https://doi.org/10.1016/j.jcorpfin.2017.10.013

Favara, G., Minoiu, C., & Ander Perez-Orive. (2021, July 30). U.S. Zombie Firms: How Many and How Consequential? Federalreserve.gov

Ferlin, M. (2023). Zombie Companies: A Comprehensive Literature. https://libstore.ugent.be/fulltxt/RUG01/003/144/160/RUG01-003144160_2023_0001_AC.pdf

Garcia-Merino, J. D., Urionabarrenetxea, S., & Leire San-Jose. (2025). The economic and social dilemma of zombie companies worldwide: institutional context and poverty impact analysis. Sustainability Accounting Management and Policy Journal. https://doi.org/10.1108/sampj-05-2024-0461

Gulen, H., & Ion, M. (2016). Policy Uncertainty and Corporate Investment. Review of Financial Studies, 29(3), 523–564. https://doi.org/10.1093/rfs/hhv050

Guo, X., Ye, J., Su, W., Luo, D., & Jin, X. (2022). Do zombie firms crowd out healthy firms and slow their growth? Evidence from China. Development Policy Review, 40(6), e12623. https://doi.org/10.1111/dpr.12623

Han, X., Hsu, S., Li, J., & An, R. (2023). Economic policy uncertainty, non-financial enterprises’ shadow banking activities and stock price crash risk. Emerging Markets Review, 54, 101003. https://doi.org/10.1016/j.ememar.2023.101003

Hoechle, D. (2007). Robust Standard Errors for Panel Regressions with Cross-Sectional Dependence. The Stata Journal: Promoting Communications on Statistics and Stata, 7(3), 281–312. https://doi.org/10.1177/1536867x0700700301

Jumah, Z., Younas, Z. I., Safdar, N., & Abdulaziz, M. (2023). Economic policy uncertainty and corporate leverage - does cash holdings matter? Evidence from the U.S. Cogent Economics & Finance, 11(1). https://doi.org/10.1080/23322039.2023.2223809

Kong, F., & Han, Y. (2024). The Effect of Economic Policy Uncertainty on a Firm’s Financing Model Evidence from China. Available at SSRN 5013911. https://doi.org/10.2139/ssrn.5013911

Kong, Q., Li, R., Wang, Z., & Peng, D. (2022). Economic policy uncertainty and firm investment decisions: Dilemma or opportunity? International Review of Financial Analysis, 83, 102301. https://doi.org/10.1016/j.irfa.2022.102301

Loang, O. K., Ahmad, Z., & Naveenan, R. V. (2023). Non-Performing Loans, Macroeconomic and Bank-specific Variables in Southeast Asia during COVID-19 Pandemic. The Singapore Economic Review, 68(03), 941–961. https://doi.org/10.1142/s0217590822500679

Martiis, D., Angela, Heil, T., & Peter, F. J. (2021). Are you a Zombie? Machine Learning Methods to Classify Unviable Firms.

Mohl, P., & Hagen, T. (2010). Do EU structural funds promote regional growth? New evidence from various panel data approaches. Regional Science and Urban Economics, 40(5), 353–365. https://doi.org/10.1016/j.regsciurbeco.2010.03.005

Naimo, F. A., & Ogbeide, S. O. (2022). Evidences and Determinants of Zombie Firms: Implication on Economic Growth. Management and Economics Review, 7(2), 141–158. https://doi.org/10.24818/mer/2022.06-03

Nazir, A., Azam, M., & Khalid, M. U. (2021). Debt financing and firm performance: empirical evidence from the Pakistan Stock Exchange. Asian Journal of Accounting Research, 6(3), 324–334. https://www.emerald.com/insight/content/doi/10.1108/AJAR-03-2019-0019/full/html

Okanda, T. L., Zhang, J., Sarfo, P. A., & Amankwah, O. (2025). Exploring the Nexus between Debt Financing and Firm Performance: A Robustness Analysis Using Instrumental Variables. International Journal of Advanced Engineering Research and Science, 12(02). https://rehpublishing.org/index.php/ijaers/article/view/64

Pastor, L., & Veronesi, P. (2012). Uncertainty about Government Policy and Stock Prices. The Journal of Finance, 67(4), 1219–1264. https://doi.org/10.1111/j.1540-6261.2012.01746.x

Pesaran, M. H. (2021). General diagnostic tests for cross-sectional dependence in panels. Empirical Economics, 60(1), 13–50. https://doi.org/10.1007/s00181-020-01875-7

Plümper, T., & Troeger, V. E. (2007). Efficient Estimation of Time-Invariant and Rarely Changing Variables in Finite Sample Panel Analyses with Unit Fixed Effects. Political Analysis, 15(2), 124–139. https://doi.org/10.1093/pan/mpm002

Rai, A. K., & Sharma, R. (2025). Capital Structure Decisions and Zombie Firms in India. International Journal of Finance & Economics. https://doi.org/10.1002/ijfe.3135

Reed, W. R., & Webb, R. (2010). The PCSE Estimator is Good -- Just Not As Good As You Think. Journal of Time Series Econometrics, 2(1). https://doi.org/10.2202/1941-1928.1032

Roland, I., Saito, Y., & Schnattinger, P. (2024). Forbearance Lending As A Crisis Management Tool: Evidence From Japan. SSRN Electronic Journal, (1, 102). https://doi.org/10.2139/ssrn.5133214

Salisu, A., Salisu, S., & Salisu, S. (2024). A news-based economic policy uncertainty index for Nigeria. Quality & Quantity, 58(5), 4987–5002. https://doi.org/10.1007/s11135-024-01886-x

Sarıgül, S. S., & Avcı, P. (2024). The Role and Impact of Zombie Firms in the Economic System: An Examination of Financial Sustainability and Innovation. Uluslararası Yönetim Akademisi Dergisi, 7(3), 894–905. https://doi.org/10.33712/mana.1556394

Schivardi, F., Sette, E., & Tabellini, G. (2022). Credit Misallocation During the European Financial Crisis. The Economic Journal, 132(641), 391–423. https://doi.org/10.1093/ej/ueab039

Shrestha, N. (2020). Detecting Multicollinearity in Regression Analysis. American Journal of Applied Mathematics and Statistics, 8(2), 39–42. https://doi.org/10.12691/ajams-8-2-1

Storz, Manuela, Koetter, M., Setzer, R., & Westphal, A. (2017). Do we want these two to tango? On zombie firms and stressed banks in Europe. No. 2104. ECB Working Paper, 2017. https://www.econstor.eu/handle/10419/175728

Sun, J., Yin, F., & Altman, E. I. (2021, December 6). Does economic policy uncertainty exacerbate corporate financial distress risk? Journal of Credit Risk.

Tay, Y. X., & Yeoh, J. X. (2025). Survival of the Weakest: Listed Zombie Firms in Malaysia’s Industrial Products and Services Sector. Malaysian Journal of Economic Studies, 62(1), 131–152. https://doi.org/10.22452/mjes.vol62no1.6

Thompson, C. G., Kim, R. S., Aloe, A. M., & Becker, B. J. (2017). Extracting the Variance Inflation Factor and Other Multicollinearity Diagnostics from Typical Regression Results. Basic and Applied Social Psychology, 39(2), 81–90. https://doi.org/10.1080/01973533.2016.1277529

Trust, P., Zahran, A. H., & Rosane Minghim. (2023). Understanding the influence of news on society decision making: application to economic policy uncertainty. Neural Computing and Applications, 35(20), 14929–14945. https://doi.org/10.1007/s00521-023-08438-8

Uesugi, I. (2025). The Economics of SME Finance. In Advances in Japanese business and economics. https://doi.org/10.1007/978-981-96-3193-3

Westerlund, J., & Narayan, P. K. (2012). Does the choice of estimator matter when forecasting returns? Journal of Banking & Finance, 36(9), 2632–2640. https://doi.org/10.1016/j.jbankfin.2012.06.005

Wu, Y., & Pan, H. (2024). Zombie firms and corporate financialization: evidence from China. Review of Managerial Science, 18(4), 1077–1099. https://doi.org/10.1007/s11846-023-00633-0

Yu, M., Guo, Y. M., Wang, D., & Gao, X. (2021). How do zombie firms affect debt financing costs of others: From spillover effects views. Pacific-Basin Finance Journal, 65, 101471. https://doi.org/10.1016/j.pacfin.2020.101471

Zhu, H., He, F., Wang, S., Ye, Q., & Liang, C. (2019). Zombie Firms and Debt Accumulation: A Theoretical Framework and Chinese Experience. China & World Economy, 27(6), 104–126. https://doi.org/10.1111/cwe.12298

Sombras da incerteza da política econômica: explorando o nexo dívida-sobrecarga em empresas zumbis

Autores

DOI:

Palavras-chave:

Resumo

Downloads

Biografia do Autor

Muhammad Adil, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Iqra Shabbir, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Rana Yassir Hussain, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Noor Ul Ain, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Shabana Nasir, UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Kiran Shehzadi , UE Business School, Division of Management and Administrative Sciences, University of Education Lahore, Punjab, Pakistan

Referências

Downloads

Publicado

Como Citar

Edição

Seção

Licença

Enviar Submissão

Palavras-chave

certificacao

e-ISSN: 2236-0972

cope

visitas_globo

Informações