Understanding the anatomy, evolution, and impact of zombie firms in Greece (2015–2023)
Following a decade marked by the sovereign debt crisis and the Covid-19 pandemic, the Greek corporate sector entered a period defined by recovery, stabilisation, and new structural challenges.
This study examines the period 2015–2023, encompassing both the recovery phase and the pandemic’s impact on the Greek corporate sector. The primary objective is to identify the presence and characteristics of “zombie” firms within the economy, drawing on firm-level data and building on the PwC zombie classification criteria: revenue growth, profitability, and debt sustainability.
What this study examines
The study investigates the anatomy of the Greek corporate landscape, aiming to answer four central questions:
- What are the key characteristics of Greek firms during the recovery and post-pandemic period and what characteristics distinguish zombie firms from healthier firms?
- How has the share of zombie firms evolved over time?
- How does the share of zombie firms differ by company size and across sectors?
- What is the relationship between zombie status and the probability of firm failure?
Key Findings
A declining share of zombies amid improved macro-financial conditions
The proportion of zombie firms has declined substantially, reaching just 2–4% in 2023, despite a temporary spike in 2020 due to the Covid-19.
The anatomy of zombie firms
A typical zombie company is smaller in terms of turnover, more reliant on debt, facing greater difficulty in meeting short-term obligations, and typically older.
Micro firms are the most vulnerable
From 2015 to 2023, 8.1% of micro firms, 2.3% of SMEs, and 1.3% of large firms were zombies on average, while the share of zombie micro firms exhibits significant volatility.
Sectoral exposure varies
Industry, Commerce, and Services -due to their large firm base- account for the highest absolute number of zombies. However, over the period 2015-2023 all sectors show substantial reductions with Commerce (–77%) and Tourism (–75%) recording the steepest declines in zombie firms.
Zombie status is linked to higher failure risk
Using an econometric survival model, the analysis reveals that zombie firms are about 2.7 times more likely to fail than healthier firms.
From survival to revival
Despite pandemic-induced setbacks, the Greek corporate sector demonstrates remarkable resilience. Between 2015 and 2021, 66% of zombie firms returned to financial health, reflecting the impact of stronger macroeconomic conditions and targeted support measures. At the same time, 14% exited the market, while 20% remained persistently trapped in zombie status.
Why this study matters
Reducing zombie prevalence is essential for resource reallocation, productivity growth, and long-term economic competitiveness. The declining trend signals improved economic conditions, while the remaining risks -especially for micro businesses- highlight the need for targeted financing tools, restructuring mechanisms, and strategic transformation initiatives.
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Revisiting zombie firms: From survival to revival
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