Charting the Course: Total Factor Productivity Trends in Croatia Post-pre-bankruptcy Act

  • Zdravko Šergo Institute of Agriculture and Tourism, Department of Tourism
  • Jasmina Gržinić Juraj Dobrila University of Pula, Department of Economics and Tourism
  • Mirela Sučić Červa Kuoni Tumlare, Zagreb
Keywords: total factor productivity, pre-bankruptcy act, synthetic control method, placebo test, Croatia


The synthetic control method (SCM) is a valuable tool for unbiased pre-bankruptcy reform analysis in economic policy evaluations. This study utilizes SCM to assess the impact of the Financial Operations and Pre-Bankruptcy Settlement Act (AFOPBS) on Croatia's total factor productivity (TFP). Control units and weights were meticulously chosen to construct a synthetic control for Croatia, creating a counterfactual scenario for the reform's absence. The policy's impact was quantified by comparing TFP growth post-policy between Croatia and its synthetic control. Placebo tests confirmed the results' significance, and further validation was achieved through panel difference-in-differences analysis (PDID). Our findings show that the pre-bankruptcy reform in late 2012 effectively reduced the gap between Croatia and its synthetic control throughout the post-treatment years. However, it had two short-term adverse impacts and a subsequent recovery-like phase. These effects were statistically significant and confirmed by cross-validation. In conclusion, Croatia's pre-bankruptcy reform significantly influenced TFP volatility, highlighting SCM's effectiveness in evaluating economic policies, especially those crucial for economic growth


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Author Biographies

Zdravko Šergo, Institute of Agriculture and Tourism, Department of Tourism

Institute of Agriculture and Tourism, Department of Tourism, Poreč, Croatia, e-mail:

Jasmina Gržinić, Juraj Dobrila University of Pula, Department of Economics and Tourism

Juraj Dobrila University of Pula, Department of Economics and Tourism, Pula, Croatia, e-mail:

Mirela Sučić Červa, Kuoni Tumlare, Zagreb

Kuoni Tumlare, Zagreb, Croatia, e-mail:


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How to Cite
Šergo Z., Gržinić J., & Sučić Červa M. (2023). Charting the Course: Total Factor Productivity Trends in Croatia Post-pre-bankruptcy Act. LeXonomica, 15(2), 189-212.