Clearing out zombie firms is a critical challenge for both developed and developing countries. This article draws upon data from Chinese listed SOEs to examine the impact of mixed-ownership reform on zombie firms. The findings indicate that non-state-owned shareholders participating in mixed-ownership reform by appointing directors can help reduce the possibility of SOEs becoming zombie firms, while participating in mixed-ownership reform through shareholding is not significant. Moreover, the impact of mixed-ownership reform on zombie firms is more pronounced for firms in competitive industries and firms located in the eastern region of China. Mechanism analysis reveals that the reduction of inefficient investment has a positive mediating effect between mixed-ownership reform and zombie firms.
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| http://www.ncbi.nlm.nih.gov/pmc/articles/PMC11221639 | PMC |
| http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0301048 | PLOS |
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Article Synopsis
- The way a company's ownership is set up affects how well it uses its resources, which is important for making a strong economy.
- Our research looked at businesses in China and found that the best mix of state (government) and non-state (private) owners happens when private ownership is between 10% and 20%.
- This study can help improve how companies share ownership and can also help other countries, especially those still developing, with their own economic changes.
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