Projects / Programmes
Restructuring of companies: an early warning system and an appropriate response from the state
| Code |
Science |
Field |
Subfield |
| 5.02.01 |
Social sciences |
Economics |
Economy sciences |
| Code |
Science |
Field |
| S184 |
Social sciences |
Economic planning |
| Code |
Science |
Field |
| 5.02 |
Social Sciences |
Economics and Business |
early warning system, recession, economic and financial crisis, coordination of economic policy makers, state aid
Researchers (5)
| no. |
Code |
Name and surname |
Research area |
Role |
Period |
No. of publicationsNo. of publications |
| 1. |
10995 |
PhD Rado Bohinc |
Social sciences |
Researcher |
2019 - 2020 |
0 |
| 2. |
24345 |
PhD Anže Burger |
Political science |
Head |
2019 - 2020 |
0 |
| 3. |
37694 |
MSc Maja Jančič |
Economics |
Researcher |
2019 - 2020 |
0 |
| 4. |
25829 |
PhD Helena Kovačič |
Administrative and organisational sciences |
Researcher |
2019 - 2020 |
0 |
| 5. |
01103 |
PhD Andrej Rus |
Sociology |
Researcher |
2019 - 2020 |
1 |
Organisations (1)
Abstract
The state (Ministry for Economy and Technology and Ministry of Finance) has, in the process of restructuring the Slovenian economy, limited and mutually incompatible economic policy tools in support of corporate restructuring instruments. For example, the Law on Rescuing Companies and Cooperatives in Difficulties, in line with the EU Guidelines on the Rescue and Restructuring of Non-Financial Corporations, can be used only for firms already in difficulties, and not for companies that are experiencing these difficulties, which is justified by the early signs of the upcoming recession. This gap in the economic system must be eliminated if we want the state's operation to be timely, effective and counter-cyclical. The state (the competent ministries) must have an effective mechanism for coordinating early action when businesses are faced with insolvency and the related need for preventive business and financial restructuring due to recessionary economic trends. Only when early warning enable appropriate rapid response in restructuring processes in the event of recession risks, systematic deleveraging of companies can be effective and rational
The aim of the research project is though to establish a coordinated system of economic policy makers (MGRT, MF, BS, Bank Association of Slovenia, SID Bank ...) in the face of the threat of general illiquidity in the economy.
There will be two comparative legal analyzes:
a. Analysis of international practices (regulation and actual functioning) of coordinated economic policy makers in several EU countries and at EU level as one of the bases for choosing an optimal early warning and intervention model for early restructuring of companies in the cas of early signs of crisis, for Slovenia; the model proposed, will be best adapted to the specificities of the regulation and functioning of the Slovenian state bodies in the field of economic policy.
b. An analysis of the EU and RS regulation on State aid rules in the EU's common internal market, linked to early intervention on company restructuring in the case of the early signs of a financial and economic crisis ("early warning").
There will also be 2 empirical analyzes
a. Empirical analysis of the characteristics of the economic crisis in 2009-2013 and the identification of repurchase measures in this period as an empirical basis for the elimination of mismatches in the functioning of economic policy makers in the event of potential new financial and economic crisis.
b. Econometric analysis of the characteristics of the economic crisis in 2009-2013 to identify the measures that proved to be efficient and sectors in which the measures that moderated downturn of economic crisis and beneficiaries, where the aid was efficient. We will identify repurchase measures in this period as an empirical basis for the elimination of mismatches in the functioning of economic policy makers in the event of potential new financial and economic crisis.
Based on both comparative legal analyzes and both empirical analyzes, a system (mechanism) of a coordinated performance of economic policy makers and an early warning system will be proposed along the early signs of the emergence of the financial and economic crisis.
Early warning system to prevent potential financial crises in Europe already exists. The financial crisis 2008-2009 and the ensuing European debt crisis led to a detailed examination of the role of financial markets in creating and strengthening economic turmoil. To prevent the recurrence of major crises, a project funded by the EU, designed an innovative early warning system (EWS). The financial crisis wreaked havoc in the global economy and required governments to take important, and in some cases unprecedented steps to limit the damage. These included the rescue of large financial institutions and injecting billions of euros into the economy, which was hit by the recession in order to stimulate growth. The social costs have been
Significance for science
In Slovenia, we have no fundamental research on the establishment of a system of coordinated performance of economic policy makers in the face of the threat of general illiquidity in the economy about early warning and action in this regard; there are a number of foreign surveys in the framework of the OECD, the World Bank, the European and the US Central Bank, the IMF, etc. on this. After the latest economic crisis, the academic and political interest in "early warning indicators" of crises is growing.
The contribution of this research project to science will firstly be in the scientific evaluation of the performance of vulnerability indicators as advance warning signs and hence to strengthening the resilience of our economy to harmful shocks.
A contribution to science will also be a better understanding of macroeconomic and structural policies in promoting or alleviating vulnerability as well as the role of politicians. to mitigate impacts and accelerate recovery, to develop an analytical framework to identify policies that are important for solid productivity and competitiveness growth, overcoming insolvency, and policies affecting productive, labor and financial markets, as well as other macroeconomic policy tools, such as subsidies and other forms of permissible state aid and tax and environmental regulations.
Market failures often create barriers to the orderly outflow of failing businesses, and therefore the effectiveness of insolvency schemes is particularly important. This is the reason why the research will analyze companies' insolvency systems according to their objectives, optimal planning (including compromises) and key features, which will significantly contribute to the development of economic and legal science in this field.
All four analyzes, both comparative and both empirical, will surely give us useful results for the development of knowledge in these fields. This applies both to the proposed analysis of international practices and regulation and to actual action in the context of the coordinated emergence of economic policy makers and early warning and intervention systems in the area of ??restructuring in the case of early signs of the emergence of an economic crisis ("early warning"), as well as for the proposed analysis of EU rules on rules of state aid in the EU's common internal market, notably from the point of view of admissible action in the restructuring processes, on the early signs of the emergence of the economic crisis.
The same is true for both empirical analyzes, this is for the proposed empirical analysis of the characteristics of the economic crisis in 2009-2013 and the identification of deleveraging measures in this period, as well as for the proposed empirical analysis and proposals for early intervention in the area of ??restructuring in the case of early signs of the crisis ("early warning «).
Significance for the country
In the last decade, the economic and financial crisis has had a very negative impact mainly on the economy, which is also the case for Slovene companies. The development and use of early warning systems that enable the identification of anticipated negative impacts on different environments, especially for the financial sector, will be of paramount importance for Slovenian banking and other corporations, as this contributes to a more credible forecasting of economic trends at the entrepreneurial level and to a more transparent environment for early action.
Different economic crises, such as banking, financial and currency, are causing high economic costs and have a negative impact on the economy and society as a whole. The development of early warning systems could help prevent the economic and financial crisis, and at the same time represent a systematic announcement of adverse events.
Early warning systems are used primarily for the detection of crises before the occurrence of damage and are therefore crucial for the situation of economic operators who are in the process of crisis-induced emergency restructuring.
Early warning systems are used in the field of financial indicators, such as value of imports, value of export foreign currency reserves, industrial production, domestic credit and nominal gross domestic product (GDP) ratio, etc .; they relate to technology, policies and procedures whose main objective is to anticipate. The research project will draw on indicators that are suitable for the specificities of the Slovenian economy and will be available policy makers and to business operators as an additional verified source of information for policy and business and development decision-making at the macro and micro level.
Most important scientific results
Final report
Most important socioeconomically and culturally relevant results
