INTERFERENCE OF THE PUBLIC SPHERE WITH THE PRIVATE SPHERE. A STUDY OF THE RELATIONSHIP BETWEEN THE DEGREE OF INSOLVENCY PHENOMENON PENALIZATION AND THE EFFECTIVENESS OF INSOLVENCY LAW

This study investigates the effect of the adopted sanction model on the effectiveness of insolvency law measured by recovery rate and creditors' satisfaction. This study focuses on sanctions, fully aware that they are part of the "carrots and sticks" incentive mechanism. Most EU countries are analyzed, and the US, Canada, and Australia. The countries were grouped into three distinct subsets based on their sanctions model's similarity using network analysis. Countries with a lenient, so-called protective sanctions model include Canada, Denmark, Ireland, Italy, and the USA. At the opposite end of the spectrum, i.e., countries with a strict, so-called enforcement model, are Bulgaria, Croatia, Finland, Germany, Lithuania, Poland, Slovakia, Spain, and Sweden. The remaining countries are characterized by a moderate sanctioning model towards the debtor. The study shows that countries with a protective sanctions model have the highest average recovery rate, while countries with a strict enforcement model have the lowest. The quantitative research was based on a literature review of studies, reports, and international publications. In the quantitative research, the non-hierarchical k-means algorithm was used to conduct cluster analysis. The study is part of the Law & Economics stream, which examines, among other things, the impact of sanctions on human behavior, in this case, that of a manager.