Financial Profile of Zombie Firms: Evidence from the Emerging Turkish Market

This study examines the financial profile of zombie companies that damage other firms, sectors, and the economy in Türkiye, an emerging market. To investigate the factors affecting the likelihood of becoming a zombie company, panel probit models are estimated using 241 non-financial listed firms on Borsa Istanbul from 2013 to 2019. Among these firms, 64 are classified as zombies. The results indicate that the probability of becoming a zombie is higher in companies that are more indebted, less efficient in asset usage, and younger. That is, less experienced companies that invest heavily in inefficient assets have the potential to become zombies and harm the economy in the long run.