Dissertation

In my dissertation Creating Destruction: The Political Economy of Zombie Firms (tentative title), I investigate political reasons behind the existence of zombie firms, unprofitable businesses that are kept alive by discounted interest rates and forbearance lending. To address this open question, I have performed fifteen months of fieldwork in Japan and China, two economies with a substantial zombie firm presence, as part of broader comparative case study research design. Through a mixed-methods approach that uses large-n descriptive statistics, 65 interviews in Japanese and Mandarin Chinese, and secondary sources, I find evidence that zombie firms emerge not only when politicians lack information about the health of the banking sector during severe economic downturns, but also in conditions where protectionist policies enhance the credit available to marginally viable firms, and where legal bankruptcy frameworks complicate firms’ pursuit of corporate restructuring. This research has implications for weakly growing economies, particularly following recessions and in times of limited fiscal resources.