Entrepreneurial ecosystems and the prevalence of regional zombie firms: A configurational analysis from China

Regional de-zombification outcomes differ markedly, yet it remains unclear whether low zombie-firm prevalence depends on a common regional prerequisite or can arise from different combinations of regional conditions. This study examines how regional entrepreneurial ecosystem (EE) elements combine to shape de-zombification outcomes. Using fuzzy-set qualitative comparative analysis, complemented by necessary condition analysis, on data from 31 Chinese provinces between 2012 and 2023, we find that no single EE element is necessary on its own for low regional zombie-firm prevalence. Instead, we identify four sufficient configurations: competition–incentive synergy, competition–signalling–spillover synergy, competition-dominated and incentive-dominated. Further asymmetric analysis shows that transportation appears in all low-prevalence configurations but is absent from those associated with non-low zombie-firm prevalence. This asymmetric pattern suggests that transportation functions not as a stand-alone necessary condition but as an enabling condition that strengthens competition, incentives, signalling and knowledge spillovers within regional ecosystems. The study contributes to zombie-firm governance and EE research by showing that de-zombification depends on specific combinations of ecosystem elements rather than any single governance lever.