The Non-linear Impact of Industrial Policy on the Disposal of Zombie Enterprises

Abstract

Based on data from China's industrial enterprise database from 2006 to 2013, combined with industrial policy data, this article empirically examines the impact of industrial policies on the disposal of zombie enterprises, explores the heterogeneity of the impact in different regions, and tries to put forward specific solutions. This study found that the strength of industrial policies has a non-linear impact on the disposal of zombie enterprises, that is, the enhancement of industrial policies firstly helps to promote the disposal of zombie enterprises and reduce the number of zombie enterprises, but after reaches a certain intensity level, the increase in the intensity of industrial policy will restrain the disposal of zombie enterprises and increase the number of zombie enterprises. At the same time, compared with the non-linear impact of the eastern coastal areas, the industrial policy in the central and western regions only shows a promotion effect on the disposal of zombie enterprises. When relevant policy departments formulate, implement, and adjust the intensity of industrial policies, they should consider the non-linear impact of industrial policies on the disposal of zombie enterprises, and select appropriate industrial policy intensity based on the characteristics of regions and industries to solve the problem of zombie enterprises.