The effect of zombie firms on the cost of debt financing with emphasis on the role of state ownership

The present study collected research-related data with the aim of investigating the effect of parasitic companies on debt financing costs with emphasis on the role of government ownership. The data of this study are post-event observations.

The method of this research is applied and is descriptive-correlational in which the research background and theoretical foundations are collected through articles, libraries and the Internet. The statistical population of this study is all companies listed on the Tehran Stock Exchange and a systematic elimination method has been used to select the sample companies. The research period is from 2014 to 2020. In order to determine the relationship between independent and dependent variables and test research hypotheses, econometric models have been used.

The results showed that the presence of the parasite company among companies in the same industry affects the cost of debt financing. Public ownership does not affect the relationship between the existence of a parasite company among co-industry companies and the cost of financing.

Originality / Value: 

Considering the confirmation of the first hypothesis and the effect of zombie companies on the cost of financing, investors are advised to pay attention to the industry situation of that company when choosing the right company and to be aware of the presence of zombie companies in it. industry to be sure, because the mentioned companies can cause the cost of financing and on the other hand reduce the profit for the companies, and this causes a decrease in the profits of the shareholders.