A hidden channel of “blood transfusion”: Internal capital market subsidies and zombie firms

IF 5.5 3区管理学 Q1 BUSINESS, FINANCE

British Accounting Review Pub Date : 2023-11-01 DOI:10.1016/j.bar.2023.101267

Xinyu Li , Huacheng Wang , Rong Li

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Abstract

From the perspective of internal capital markets, we investigate the causes of zombie firms and propose possible governance measures. Based on Chinese A-share listed firms, we find that internal capital market subsidies promote the zombification of firms. This impact is stronger when the liquidity of the external capital market is higher or when there is a finance firm in the internal capital market. Additionally, there is a “pecking order” of the subsidies that contribute to the zombification of firms: government subsidies take the lead, followed by internal capital market subsidies, and then bank loans. The motivations for internal capital markets to subsidize zombie firms include avoiding risk contagion, avoiding losing control rights, being socially responsible, and maintaining rent-seeking opportunities for managers. The sources of internal capital market subsidies are mainly parent firms and brother firms. Constraining agency problems and engaging in related major asset restructuring play important role in the governance of zombie firms. Overall, our study reveals internal capital markets to be a “blood transfusion” channel and it provides guidance for tackling the problem of zombie firms.

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一个隐藏的“输血”渠道:内部资本市场补贴和僵尸企业

本文从内部资本市场的角度分析了僵尸企业产生的原因，并提出了可能的治理措施。以中国a股上市公司为研究对象，我们发现内部资本市场补贴促进了公司的僵尸化。当外部资本市场的流动性较高或内部资本市场中存在金融公司时，这种影响更强。此外，导致企业僵尸化的补贴有一个“啄木鸟顺序”:政府补贴带头，其次是内部资本市场补贴，然后是银行贷款。内部资本市场补贴僵尸企业的动机包括避免风险传染、避免失去控制权、承担社会责任以及为管理者维持寻租机会。内部资本市场补贴的来源主要是母公司和兄弟公司。约束代理问题和参与相关重大资产重组在僵尸企业治理中发挥着重要作用。总体而言，我们的研究揭示了内部资本市场是一个“输血”渠道，并为解决僵尸企业问题提供了指导。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

British Accounting Review BUSINESS, FINANCE-

CiteScore

8.60

自引率

3.90%

发文量

审稿时长

76 days

期刊介绍： The British Accounting Review*is pleased to publish original scholarly papers across the whole spectrum of accounting and finance. The journal is eclectic and pluralistic and contributions are welcomed across a wide range of research methodologies (e.g. analytical, archival, experimental, survey and qualitative case methods) and topics (e.g. financial accounting, management accounting, finance and financial management, auditing, public sector accounting, social and environmental accounting; accounting education and accounting history), evidence from UK and non-UK sources are equally acceptable.