Firm Barriers in the Western Balkans: A Comprehensive Analysis

Kujtim Zylfijaj () and Lura Rexhepi Mahmutaj ()
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Kujtim Zylfijaj: University for Business and Technology
Lura Rexhepi Mahmutaj: University of Prishtina

A chapter in Management of SMEs and Startups, 2026, pp 9-36 from Springer

Abstract: Abstract This chapter examines the barriers firms face in six Western Balkan countries and how these challenges affect their performance. Using probit and logit regression models on a unique dataset, we assess the likelihood of firm improvement based on reported obstacles and firm characteristics. The results indicate that macroeconomic instability, the informal economy, and political instability are major impediments to firm improvement, increasing business costs and limiting growth opportunities. Barriers related to access to finance and labor market conditions further reduce the probability of improvement, while innovation enhances it. This study offers policymakers actionable insights, highlighting the need for targeted reforms to reduce firm-level barriers and foster a more supportive business environment for regional growth and integration into European markets.

Keywords: Firm performance; Business barriers; Western Balkans; Small and medium enterprises; Business environment (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:fgfchp:978-3-032-17538-0_2

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DOI: 10.1007/978-3-032-17538-0_2

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