Competition and SMEs front informal economy - Case of Kosovo

• Author: Afrim Loku - Naim Baftiu - Nadire Shehu Loku
• Position: Vice Rector for Budget and Finance in University of Applied Sciences in Ferizaj, Kosovo - Professor in University of Prizereni 'Ukshin Hoti', Kosovo - Assistant Professor in European College of Kosovo, Pristina
• Pages: 207-215

Vol. 3 No. 2

July 2017

ISSN 2410-3918

Acces online at www.iipccl.org

207

Academic Journal of Business, Administration, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

Competition and SMEs front informal economy - Case of Kosovo

Afrim Loku

Vice Rector for Budget and Finance in University of Applied Sciences in Ferizaj – Kosovo

Naim Ba iu

Professor in University of Prizereni “Ukshin Hoti”– Kosovo

Nadire Shehu Loku

Assistant Professor in European College of Kosovo, Pristina

Abstract

This study aims to raise a discussion in order to raise awareness of the population about

understanding the problems that informality brings. In general, the study has the potential

to not only a ect economic development, but also to set up a socio-political agenda that will

benefi t the citizens of Kosovo. Informality is a globally widespread phenomenon, which has

become a feature of developed and developing countries. Despite the global reach, and despite

the adverse e ects it has, informality still remains the term that causes many disagreements,

which are directly related to its defi nition, classifi cation and measurement. This study aims to

present the real picture of informality in Kosovo; The size, the determinants, and the economic

consequences that this phenomenon may cause. In this study, informality is defi ned as a

phenomenon that describes all the economic activities that are secretly developed by the state

and which do not neglect the rule of the state. As such, it includes concepts such as tax evasion,

informal employment and undersigning employee salaries.

Keywords: Competition, SMEs, informality, labour market, economic development, strategies,

long term, the government.

Introduction

The purpose of this research is to provide a conceptual framework for understanding

economic informality in Kosovo as an input for further analysis and policy formulation

that address informality. The bulk of informal economic activities in Kosovo, some data

include about half of the workforce, is quite worrying due to possible irregularities

occurring in the informal sector due to lack of protection for workers operating in

informal enterprises, but also due to possible disparities between tax collection and

the use of public goods and services. Informality is a widespread global phenomenon

that has become a feature of developed and developing countries. Despite the global

reach, and despite the adverse e ects it has, informality still remains the term that

causes many disagreements, which are directly related to its defi nition, classifi cation

and measurement. This study aims to present the real picture of informality in

Kosovo; The size, the determinants, and the economic consequences that this

phenomenon may cause. Kosovo is located in the central part of the Balkan Peninsula

in Southeast Europe. It borders with Serbia, Montenegro, Albania and Macedonia.