Abstract:

This paper explores the link between strategic networking and divergent institutional environments of Southeast Europe. CEOs and owners of 963 SMEs from six former SFR Yugoslavian countries responded to a questionnaire survey conducted in 2019-2020. Two countries are members of the European union (Croatia and Slovenia), while the remaining four are not (Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia). SME size is used to explore whether differences exist in the strategic networking and institutional environment relationship. Additionally, empirical study questions whether division between European union and Western Balkan countries can explain these differences. Results show that strategic networking is greater in Western Balkans than in European union member states. Moreover, strategic networking influences competitiveness and ease of financing, while SMEs’ size decreases the effect strategic networking has on competitiveness and ease of financing, but only for the European union member states. Policy implication and limitation of the study are discussed.