Zombie companies, as one of the major challenges in the economy, refers to the situation of companies that, without sufficient financial capacity and optimal performance, continue to operate solely by relying on financial support or special facilities. The existence of these companies in the economy will lead to a lack of optimal allocation of financial resources, reduced productivity growth, loss of investment opportunities, and ultimately recession.

Given that governments are considered to be the main pillars and players in the economy and their performance is influential in the emergence and survival of zombie companies, this study examines the effect of government ownership on the zombie nature of companies listed on the Tehran Stock Exchange.

The results of the study indicate that state ownership is one of the factors that can play a role in the zombieization of companies. In fact, the results showed that there is a significant and positive relationship between state ownership and government-affiliated institutions and the zombieization of companies. In other words, as the percentage of state ownership and dependence on government institutions increases, the zombieization of companies also increases.