Abstract

Zombie firms pose a direct obstacle to China’s efforts to achieve high-quality economic development, as they drain resources, perpetuate inefficiency, and exacerbate overcapacity. Understanding the factors that drive corporate zombification is therefore critical for policymakers and managers alike. From a perspective of internal governance, this study employs a dataset comprising 24,905 observations from 2009 to 2023 to investigate the relationship between managerial myopia and corporate zombification, as well as the corresponding influence mechanism. The results indicate that managerial myopia significantly and positively influences the corporate zombification. Furthermore, the results of the influence mechanism indicate that strategic aggressiveness mediates the relationship between managerial myopia and corporate zombification. The effects of managerial myopia on corporate zombification and strategic aggressiveness are significantly more pronounced in corporations operating under conditions of higher environmental uncertainty. The findings can provide some insights into preventing firms from becoming the “walking dead” from an internal governance perspective, thereby helping promote the high-quality economic development.