Firm Performance and Obstacles to Doing Business in the Western Balkans: Evidence from the BEEPS

Using the responses in the latest round of the Business Environment and Enterprise Performance Survey (BEEPS) of approximately 1,800 business owners and senior managers in the Western Balkans, this paper examines the linkages between firm performance and perceived obstacles to doing business. We find that unfair competition from the informal sector is the main concern, although other obstacles also adversely affect firm performance. The paper highlights the need to tackle more rigorously all sorts of informality, not only in the context of unfair competition, but also for the sustainability of public finances.