Exploring business climate satisfaction through managerial perceptions: Evidence from Western Balkan countries

This paper examines the relationship between economic opportunities, costs, and strategic management decisions in the Western Balkans, as well as the impact of these factors on business climate satisfaction. The analysis is based on information presented by the Regional Cooperation Council and includes a sample of 606 businesses from six Western Balkan countries. The factors of business climate satisfaction were used as the dependent variable, and the ordered logistic regression was employed to test them. The findings reveal that the noted business climate in the previous 12 months has a robustly adverse impact, which means that businesses with deteriorating conditions report less satisfaction. Business revenues and sales display an insignificant impact, which indicates that temporary changes in revenues in the short run do not have a strong impact on overall satisfaction. On the other hand, business costs have a constructive and meaningful influence, indicating the ability of businesses to accommodate increasing costs by adjusting prices or operating policies. Similarly, the prospects of the economic situation and the intention to increase workers' wages have a strong, positive, and statistically significant association with the level of business climate satisfaction, which demonstrates the significance of forward-looking confidence and personnel-related policies. The study is relevant to the literature in that it provides a new empirical estimation of the influence of cost pressures, compensation schemes, and macroeconomic expectations on business sentiment in the Western Balkans, a region that is usually underrepresented in comparative management studies.