Regulation of the “too-big-to-fail” entities in the Republic of Croatia

Abstract

The contemporary stand among scientists is that the role of the state, within mixed market economies, should be reduced to the task of ensuring the institutional framework in order to protect the free market. However, occurrences of the “too-big-to-fail” entities constitute a challenge for the government regarding its ability to manage economic affairs in the traditional manner. Given that the nature of these entities makes them relevant on the verge of their own collapse, the authors focused on the legal and economic aftermath of their failures. The authors undertook extensive research into this topic with the primary goal of arguing that government regulation, in the cases of collapsing “too-big-to-fail” entities, is necessary for achieving stability of the system. After researching of the government’s role both in theory and practice, the authors displayed the findings of the analysis of the legal possibilities within the bankruptcy law of the Republic of Croatia. The historical and practical context of the research is the implementation of the legislation in the complex case of Agrokor Group. Ultimately, the authors argue that the magnitude of the collapsing “too-big-to-fail” company requires government intervention in order to preserve economic stability in the region, in addition to maximizing social welfare.

Fiscal Sustainability and Its Implications for Economic Growth in Egypt: An Empirical Analysis

“…On the other hand, government revenues in the previous year have a negative and statistically significant effect on economic growth in the current year, with a 1% increase in government revenues leading to a −0.08% decrease in economic growth in the current year. This finding is consistent with the results of a previous study (Benazić, 2006).…”

“…The results of our study offer valuable insights into the impact of different factors on economic growth in Egypt, which can inform policymaking and future research. The study found that government revenues do not significantly impact long-term economic growth in Egypt, in contrast to some other studies that have reported a negative impact (Benazić, 2006; Dang, 2013; Karras & Furceri, 2009; Marimuthu et al, 2021) or positive effects (Gray et al, 2007). This difference highlights the need to understand better the specific context in which fiscal policies are implemented.…”

“…This means a mutual connection between the two variables, where changes in one variable can affect changes in the other over a long time. Another study (Benazić, 2006) examined the association between fiscal policy and economic activity using monthly data from 1995 to 2004. The study applied cointegration analysis and a vector error correction model to examine the association between revenues, expenditures, and economic growth.…”

Effects of Economic and Political Events on Stock Returns: Event Study of the Agrokor Case in Croatia

“…The political notation and classification and more details can be found in Rančić (2018) or Ivanković (2017). The "too big to fail" discussion, including considerations regarding the Agrokor case, can be found in Rubinić and Bodul (2018). The main approach here is that investors observe happenings in the economy and adjust their forecasts and investment decisions, as discussed in Schwert (1990) or Cochrane (2008).…”

Agrokor: Political Aspects of the Crisis of Croatia’s Biggest Conglomerate

“…The crisis and the collapse of Agrokor is the first case in the history of Croatia as an independent country which can be considered as "too-big-to-fail" (TBTF) case [10]. Companies, belonging to this category, are characterized by their systematic importance for the whole country due to their size, area of influnce, number of employees, etc.…”