Corporate Finance, Accounting and Business Management

Background

Featured in the 6th International Conference on Business and Policy Studies, this symposium examines the financial reporting practices, corporate governance challenges, and economic implications associated with zombie firms. Zombie firms are businesses that remain operational despite persistent financial weakness and limited capacity to meet their financial obligations. Zombie firms have attracted growing attention because of their implications for productivity, investment and economic growth. Their continued survival may reflect financing arrangements, creditor forbearance, institutional conditions or other factors that allow economically weak businesses to remain active. These conditions also raise important questions about financial reporting incentives and the credibility of reported corporate performance. Firms facing prolonged financial difficulties may have incentives to manage reported earnings, influence perceptions of financial health or delay the recognition of economic losses. Understanding these behaviours is important for investors, lenders, auditors, regulators and policymakers. This symposium examines the relationship between corporate financial vulnerability, earnings manipulation and the wider financial and economic consequences of zombie firms, situating accounting and finance research within the broader theme of economic transformation.

Goal/Rationale

The symposium aims to bring together researchers examining how financially vulnerable firms influence, and respond to, the institutional and economic environments in which they operate. Its central focus is earnings manipulation by zombie firms and the implications for financial reporting quality, corporate governance, financing decisions and resource allocation. A key question is whether firms that remain dependent on external financing or creditor support have distinctive incentives to manipulate earnings, manage accruals, alter real operating activities or delay the recognition of financial difficulties. The symposium will also consider how these behaviours affect the ability of investors and lenders to assess corporate risk and how audit quality, governance arrangements, financial regulation and institutional characteristics may constrain or facilitate opportunistic reporting. By connecting accounting evidence with research in corporate finance, economics and business management, the symposium seeks to encourage interdisciplinary explanations of why financially weak firms persist and what their survival means for economic efficiency. It will provide a forum for discussing empirical findings, research methods, theoretical developments and policy implications, while identifying opportunities for international collaboration and future research.

Scope

The proposed event will particularly focus on financial distress discussing zombie firms and related issues in accounting, finance, economics and business management. Relevant topics include, but are not limited to:

• Earnings manipulation, accrual-based earnings management and real earnings management by zombie firms.
• Financial reporting quality, loss recognition, financial distress and corporate transparency.
• Corporate governance, audit quality and external monitoring of financially vulnerable firms.
• Debt financing, creditor forbearance, lending relationships and the persistence of zombie firms.
• Capital allocation, investment efficiency, productivity and economic growth.
• Institutional environments, regulatory interventions and policy responses to financially weak businesses.
• The role of financial reporting and disclosure in identifying corporate vulnerability.
• Comparative and international evidence on zombie firms and corporate behaviour.
• Methodological approaches to identifying zombie firms and measuring earnings manipulation.

Both theoretical and empirical contributions are welcome, including studies using archival data, international comparisons and policy-relevant research.