WHILE there is no globally-agreed upon official definition, zombie firms are widely referred to as those that are risky, unproductive and unviable, yet manage to avoid immediate default, most likely due to continued support from banks, investors or governments, amid misaligned incentives.
The existence of zombie firms is inevitable in any country adopting market capitalism, at least for a certain period and under certain conditions, such as immediately after unexpected shocks like a financial or nonfinancial crisis on a global or regional scale.
