Crime and firm performance: Empirical evidence from the Balkan region

Abstract

This paper aims to analyze the impact of business-related crime on the performance of Kosovo firms. This also represents the research problem of this paper. The sample of firms consists of 200 firms from different economic sectors. This research is based on the research of Moyo (2012) and Botrić (2021) who used similar variables related to this issue. Through the ordinary least squares (OLS) econometric model, the results have been obtained that show that criminality or different types of crime of a business nature have a negative impact on the performance of these firms. Also, the results obtained prove that firms from the region of Pristina and Mitrovica are more exposed to crime, while as for the size of the firms, medium-sized firms are more exposed to crime compared to other firms. Firms in the textile and wood sectors, compared to firms in other sectors, are most affected by crime. Business associations and government institutions should design state policies that would ensure a safe environment for all firms in all regions of Kosovo and economic sectors. The relevance of this research lies in the fact that these findings have never been elaborated on by other authors from Kosovo.