  Extraordinary fiscal and monetary interventions in response to the COVID-19
pandemic have revived concerns about zombie prevalence in advanced economies.
Within a sample of publicly listed U.S. companies, we find zombie prevalence
and zombie-lending not to be a widespread phenomenon per se. Nevertheless, our
results reveal negative spillovers of zombie-lending on productivity,
capital-growth, and employment-growth of non-zombies as well as on overall
business dynamism. It is predominantly the class of healthy small- and
medium-sized companies that is sensitive to zombie-lending activities, with
financial constraints further amplifying these effects.
