How Can FinTech Reduce Corporate Zombification Risk?

ABSTRACT

Based on data from China’s A-share listed companies from 2011 to 2018, in this paper, we examine the impact of FinTech on corporate zombification risk. We find that FinTech can reduce corporate zombification risk; for each unit increase in FinTech, the probability of a company becoming a zombie firm decreases by 7.8%. In addition, FinTech can reduce corporate zombification risk by improving the efficiency of bank credit and government subsidies. Furthermore, the breadth of FinTech coverage and the depth of application can reduce corporate zombification risk, but the degree of digitization fails to play a role. Finally, not only can FinTech reduce corporate zombification risk, but it can also inhibit the contagion effect of zombie firms in the industry.

KEYWORDS:

• FinTech
• zombie firms
• influencing mechanism
• structural features
• contagion effect

JEL:

• G20
• G39
• H50
• O33

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Supplemental data

Supplemental data for this article can be accessed online at https://doi.org/10.1080/1540496X.2022.2078698.

Additional information

Funding

This work was supported by the National Social Science Foundation of China (Grant No. 21CJY069).