IMF Working Papers

Firm Performance, Business Supports and Zombification over the Pandemic

By Alexander Amundsen, Amélie Lafrance-Cooke, Danny Leung

January 31, 2025

Download PDF More Formats on IMF eLibrary Order a Print Copy
More formats on IMF eLibrary Order a Print Copy

Preview Citation

Format: Chicago

Alexander Amundsen, Amélie Lafrance-Cooke, and Danny Leung. "Firm Performance, Business Supports and Zombification over the Pandemic", IMF Working Papers 2025, 029 (2025), accessed March 5, 2025, https://doi.org/10.5089/9798400298776.001

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Did the COVID-19 pandemic zombify the economy? Commentators have pointed to the pandemic and related business support measures potentially fueling zombification. Using administrative data covering the universe of Canadian firms, we find a broad-based decline in the share of zombie firms across industries relative to pre-pandemic levels. Whereas business support measures kept firms alive and operating as non-zombie firms, the decline in the zombie firm share was caused by would-be zombie firms exiting, indicative of the pandemic’s cleansing effects. As a consequence, while aggregate labour productivity worsened in Canada over the pandemic, it was not driven by zombie firms.

Subject: COVID-19, Employment, Health, Labor, National accounts, Production, Productivity

Keywords: Aggregate Productivity, Business support measure, Cleansing effect, COVID-19, COVID-19 Pandemic, Employment, Europe, Exit component, Firm performance, Productivity, Zombie firm, Zombie Firms

Publication Details

You May Also Be Interested In...

Not all Housing Cycles are Created Equal: Macroeconomic Consequences of Housing Booms

February 28, 2025

Pension Reform and Stock Market Development

February 28, 2025

Monetary Policy and Inflation Expectations: High-Frequency Evidence from Brazil

February 28, 2025

India: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for India

February 27, 2025