Did the COVID-19 pandemic zombify the economy? A look at zombie firms

Zombie firms are businesses that persistently perform poorly over time without exiting, and their prevalence has been rising over time across many advanced economies. They negatively impact economic growth as they tend to be unproductive and compete with other healthy firms for scarce resources. This article summarizes research by Statistics Canada, that examined zombie firm prevalence and their dynamics over the pandemic period, whether business supports helped to prop up zombie firms or encourage their survival, and their contribution to the decline in Canada’s productivity.