STABILITY OF ECONOMIC TURNOVER AS A FACTOR OF MARKET PREDICTABILITY

Abstract

The subject of the present study is market predictability as an autonomous economic and legal category, and its functional relationship with the stability of economic turnover. Market predictability is defined as an aggregated characteristic of the institutional environment that reflects the extent to which market participants are able, in advance and with a reasonable degree of certainty, to relate their economic conduct to its probable legal and economic consequences. This enables them to form expectations that remain stable over time regarding the operation of rules, the enforceability of obligations, and the protection of rights. The relevance of the topic is heightened by contemporary armed conflicts, particularly the full-scale war against Ukraine. The consequences of this war are disrupting supply chains, contractual ties and investment horizons, thereby eroding predictability in both the global and national economies. The purpose of the article is threefold: to substantiate market predictability as a distinct phenomenon and functional result of stable economic turnover; to define its content, features and nature; and to develop a system of criteria for assessing market predictability that captures the influence of stable economic turnover on market participants' behaviour. Methodology. The study combines economic and legal approaches. General scientific methods of analysis and synthesis are employed to break down the category into its components and functions. The systemic-structural and functional methods form the basis of the two-channel model of influence, while the formal-legal and comparative-legal methods are used to organise legal instruments and align national approaches with the EU acquis. This argument is supported by recent European empirical research indexed in Scopus and Web of Science. Results. Firstly, market predictability is distinguished from neighbouring categories. Legal certainty is characterised by the clarity, coherence and consistency of norms and their application. Stability of economic turnover reflects the continuity, protection and recoverability of economic ties. Market predictability, on the other hand, is characterised by participants' ability to form well-founded expectations. Therefore, predictability is not identical to the stability of turnover, but is one of its functional results. Secondly, the formation of predictability through a two-channel mechanism is revealed: turnover stability shapes participants' expectations by reducing transaction costs at the stages of concluding, performing and enforcing contracts, and by strengthening institutional trust among counterparties, creditors and investors. Empirical studies confirm the link between judicial efficiency and the development of trade credit, the level of doubtful receivables and economic growth rates. This supports the idea that the consistency and effectiveness of legal regulation's application is more important than its formal immutability. Thirdly, a system of criteria for assessing market predictability has been developed. Each criterion is linked to an observable indicator and the corresponding channel through which turnover stability affects market conduct. This design ensures the system's empirical verifiability and distinguishes it from generalised assessments of institutional quality. This gives the approach a diagnostic character, making it possible to identify the sources of a predictability deficit and determine appropriate legal responses. Fourthly, the significance of predictable insolvency procedures in forming a system is substantiated. Uncertainty regarding the duration, cost and outcome of such proceedings complicates credit risk assessment and may increase financing costs, whereas timely and foreseeable restructuring and liquidation procedures boost the confidence of creditors and investors. Conclusions. The insolvency regime should not be regarded as a peripheral matter, but as a key element in ensuring the stability and predictability of economic turnover. The practical value of the results lies in the applicability of the proposed system of criteria for evaluating the impact of reforms to economic legislation, the judiciary, enforcement proceedings and insolvency procedures on the behavioural expectations of market participants. During wartime and the subsequent period of transformation, the criteria for the restoration of economic ties, the effectiveness of rights protection and the trust of creditors acquire particular importance. In this context, securing market predictability – notably by aligning national insolvency legislation with EU law – should be considered an independent area of economic and legal policy, and a precondition for sustainable recovery.