The efficiency of bankruptcy proceedings and the severity of insolvency regulations in view of the implementation of the New Opportunity Policy

Banasik Przemysław, Morawska Sylwia, Prusak Błażej, Łukowski Michal () and Pustułka Katarzyna
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Banasik Przemysław: Faculty of Management and Economics, Gdańsk University of Technology, Gdańsk, Poland
Morawska Sylwia: Collegium of Business Administration, SGH Warsaw School of Economics, Warsaw, Poland
Prusak Błażej: Faculty of Management and Economics, Gdańsk University of Technology, Gdańsk, Poland
Łukowski Michal: Institute of Finance, Poznań University of Economics and Business, Poznań, Poland
Pustułka Katarzyna: SGH Warsaw School of Economics, Warsaw, Poland

International Journal of Management and Economics, 2025, vol. 61, issue 2, 110-122

Abstract: The article investigates the relationship between the efficiency of insolvency proceedings, as measured by their duration, and measures the severity of bankruptcy law toward debtors in 27 countries, of which 23 are EU. This objective was achieved using quantitative methods – Pearson’s correlation, pooled panel regression and Granger causality. Research shows no direct correlation between the two variables mentioned above. The increase in sanctions in bankruptcy law contributed to a decrease in the efficiency of insolvency proceedings. In addition, less stringent conditions concerning the time taken to file a bankruptcy petition translated into a shorter duration of insolvency proceedings. Therefore, supporting the New Opportunity Policy, we recommend that regulators focus on softening the legal requirements for filing a bankruptcy petition, for setting a time limit for filing and on reducing the sanctions for honest debtors, including those imposed for failure to file for bankruptcy within the period prescribed by law.

Keywords: bankruptcy; efficiency of insolvency proceedings; law & economics; New Opportunity Policy; restructuring (search for similar items in EconPapers)
JEL-codes: G33 G38 K00 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ijomae:v:61:y:2025:i:2:p:110-122:n:1004

DOI: 10.2478/ijme-2024-0034

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