Resumen
The main aim of this paper is to investigate the determinants of the financing obstacles and the effect of financial obstacles on the Small and Medium Enterprises (SME) growth in the Western Balkan region. The study employs OLS and probit models and using data from the Business Environment and Enterprise Survey (BEEPS V), conducted by EBRD and World Bank in the period 2012 ? 2016. The econometric models used to achieve the main aim of this paper include the OLS and probit regression. From the results of the OLS, the study concludes that revealing the financial obstacles is an important determinant of SMEs' growth in the Western Balkan countries. Further, among the firm-specific determinants of the financial constraints of SMEs, the study concludes that large firms face fewer financing obstacles than small firms, while older firms are more financially constrained than new enterprises. In addition, in the context of the ownership, findings reveal that SMEs with high foreign ownership of the firms, report fewer financial constraints. Given the presented results, it is important to emphasize the vital role of SMEs as the main employer in the Western Balkans region, emphasizing the need for policymakers to address possible reforms in achieving better regulation, institutional development, and governance efficiency, accounting standards, business, and better credit environment.