This article investigates whether zombie firms among non-financial listed Indian firms are related to lower stock price synchronicity and higher crash risk for the period of 2011–2023. Using firm-fixed effects regressions and crash-risk measures, including negative conditional skewness (NCSKEW), downward volatility (DUVOL), and CRASH COUNT, the findings show that zombie firms exhibit lower stock return synchronicity and higher crash risk. The results remain robust across alternative zombie definitions, entropy-balancing methods, and Oster coefficient stability tests addressing potential omitted-variable bias. The evidence further suggests that continued evergreening of zombie firms is related to lower stock price informativeness and higher downside crash risk. Overall, the study contributes to the literature on zombification and market-based risk in emerging economies, with implications for corporate governance, credit allocation, and financial stability.
DORA et al. (Fri,) studied this question.