Skip to navigationSkip to content
LIVING DEAD

Zombie companies are hiding an uncomfortable truth about the global economy

Reuters/Mike Segar
Zombie companies are occupying the global economy.
  • John Detrixhe
By John Detrixhe

Future of finance reporter

What do a satellite company, a rural hospital chain, and an oil driller have in common? They are all considered zombie companies.

For economists, the corporate version of the living dead is a business that’s kept alive by financing instead of by making money. Or, in accountant terms, these are companies that don’t generate enough profit to cover the cost of the interest on their debts.

The zombies’ share of the market appears to be growing. About 17% of the world’s 45,000 public companies covered by FactSet haven’t generated enough earnings before interest and taxes (EBIT) to cover interest costs for at least the past three years. Bank for International Settlements economists, using a similar but narrower definition, find that the world’s equity markets’ share of zombies has risen to more than 12%, up more than 8 percentage points since the mid 1990s.

Enrich your perspective. Embolden your work. Become a Quartz member.

Your membership supports a team of global Quartz journalists reporting on the forces shaping our world. We make sense of accelerating change and help you get ahead of it with business news for the next era, not just the next hour. Subscribe to Quartz today.

こちらは英語版への登録ページです。
Quartz Japanへの登録をご希望の方はこちらから。