Author(s):
1. Georgios Panos,

Abstract:
In the last two decades, the Western Balkan counties have been a laboratory of business environment and financial sector reform in the post-communist and the post-conflict transition processes. The main aim was to support formal business operation and performance, as well as to prevent the old norms of informal business conduct. Using data from more than 5,000 firms in eight Western Balkan countries we examine three hypotheses related to the performance and behaviour/conduct of firms that stemmed from the informal sector. Our results indicate that firms of informal origin perform better in terms of sales and employment growth, as well as exporting activity. Moreover, we find a moderate positive relationship between access to finance among informal firms and their performance, which becomes stronger for young firms of informal origin. We interpret this as in accordance with a competitive view of informality in the Western Balkans. Finally, we test whether informal forms of conduct persist among formerly informal firms. Our results strongly reject this hypothesis.

Key words:
Informal sector, Western Balkans, firm performance, access to finance, informal norms.

Thematic field:
Gray markets in developing countries - the role o

Date of abstract submission:
29.06.2012.

Number of visits:
417

Conference:
REDETE 2012

Applied paper from author