14 April 2022

Join us online on 29 April at 16:00 for our Credit Research Centre Seminar Series with Professor Edward I. Altman, the author of the famous z-score model, presenting a paper on zombie firms.


Prof Altman will present a paper on 'Global Zombies'. The paper is co-authored with Rui Dai from the Wharton Research Data Services of the University of Pennsylvania, and Wei Wang from the Smith School of Business, Queen's University.


We propose a two-step filtering process using interest coverage ratio and default prediction models to measure the extent of “zombieism” globally: a phenomenon that describes the existence of companies that are insolvent but continue to live on due to unusual market conditions, financial institution, and investor or government support. We find that the average fraction of publicly traded zombie firms in the world’s 20 largest economies increased significantly in the past 30 years but barely changed during the pandemic period in 2020. We find that democratic accountability, financial market development, creditor rights, and debt enforcement efficiency help to explain cross-country variations in zombie ratios. Using staggered bankruptcy reforms in eight countries after 2000 as an exogenous variation to the modernization of the bankruptcy code, we also find that the zombie ratio declines by an average of 1.4 percentage points after the reforms in those countries.

About the speaker

Edward I. Altman is a world-recognised and highly sought-after expert on all matters of distressed debt and its predictive modeling. Dr Altman is the Director of Research in Credit and Debt Markets at the NYU Salomon Center for the Study of Financial Institutions. Prior to serving in his present position, Professor Altman chaired the Stern School's MBA Program for 12 years. Dr Altman was named to the Max L. Heine endowed professorship at Stern in 1988 and his Emeritus status in September 2015.

Professor Altman was inducted into the Fixed Income Analysts Society Hall of Fame in 2001, President of the Financial Management Association (2003) and a FMA Fellow in 2004 and was among the inaugural inductees into the Turnaround Management Association’s Hall of Fame in 2008. In 2005, he was named one of the '100 Most Influential People in Finance' by Treasury & Risk Management magazine. He also received an Honorary Doctorate from Lund University, Sweden in May 2011.

Professor Altman has published or edited two-dozen books and over 150 articles in scholarly finance, accounting and economic journals. His most prominent contribution is the development of the Altman Z-Score family of models.


Further information