Adnan S . Efendic | University of Sarajevo (original) (raw)

Papers by Adnan S . Efendic

Southeast European and Black Sea Studies, 2023

This article examines the long-term effects of war exposure on generalized trust and risk attitud... more This article examines the long-term effects of war exposure on generalized trust and risk attitudes 20 years after the conflict in Bosnia and Herzegovina. Our study goes beyond the destruction of physical and human capital and investigates the effects of war exposure on psychological preferences and beliefs, as well as their mutual relationship and determinants. Our empirical strategy employs a nationally representative survey and an endogenous Seemingly Unrelated Model. We discover that individuals living in municipalities with greater war fatalities report significantly higher distrust in people and simultaneously express greater risk aversion. Moreover, there is a mutually endogenous and strong positive relationship between the two dependent variables, whereby greater trust is associated with greater risk-seeking. Consequently, our results demonstrate that the tragic consequences of war are not only confined to negative socio-economic outcomes but also leave a lasting impact on the psychological preferences of people that experienced it.

Europe-Asia Studies, 2023

This article investigates informal networks of entrepreneurs in Southeast Europe. Informal networ... more This article investigates informal networks of entrepreneurs in Southeast Europe. Informal networks are defined as based on trust relationships and used for seeking competitive advantage in business. We assess the costs of informal networks, including their non-monetary and monetary components, on the basis of in-depth interviews with entrepreneurs in small and medium-sized business in the region. The evidence points to an ambivalence towards informal networks, perceived to be both affective and instrumental, and the prevalence of double standards. Informal networks are welcome when they help but resented when they help others, thus reproducing the pressure of maintaining informal networks. ONE OF OUR RESPONDENTS, AN ENTREPRENEUR WHO TRAINED in the United States and returned to Croatia to set up a business, summed up his perception of the prominence, size and costs of informal networks as follows: I was educated in the US, so when I came back here and tried to do everything by the book, I did not fully understand informal networking and did not accept this environment, let's call it the 'Balkan mentality'. Several years ago, I came to realise how our system functioned and … [I] started socialising and networking more to find my own people … I could not progress without them. There are between 20 and 25 people in my network, and I stay in close, relatively intensive contact with them. …. I see them twice a month and I have written down some important details about these people-what they like, prefer to do, and so on. … In the beginning, it was a burden to me. But since I noticed the benefits it brought me, it stopped [being a burden]. I became convinced that the more you give, the more you get back. However, it is not just cost-benefitbased exchange; the relationship works based on principle of solidarity as well, because even if

Entrepreneurship Theory and Practice, 2022

How can entrepreneurs protect their wellbeing during a crisis? Does engaging agility (namely, opp... more How can entrepreneurs protect their wellbeing during a crisis? Does engaging agility (namely, opportunity agility and planning agility) in response to adversity help entrepreneurs safeguard their wellbeing? Activated by adversity, agility may function as a specific resilience mechanism enabling positive adaption to crisis. We studied 3162 entrepreneurs from 20 countries during the COVID-19 pandemic and found that more severe national lockdowns enhanced firm-level adversity for entrepreneurs and diminished their wellbeing. Moreover, entrepreneurs who combined opportunity agility with planning agility experienced higher wellbeing but planning agility alone lowered wellbeing. Entrepreneur agility offers a new agentic perspective to research on entrepreneur wellbeing.

Post-Communist Economies, 2022

Editorial to the special issue focused on entrepreneurship and local development in postcommunist... more Editorial to the special issue focused on entrepreneurship and local development in postcommunist Central and Eastern Europe.

Defence and Peace Economics, 2022

We investigate the long-term relationship between conflict-related migration and individual socio... more We investigate the long-term relationship between conflict-related migration and individual socioeconomic inequality. Looking at the post-conflict environment of Bosnia and Herzegovina (BiH), a former Yugoslav state most heavily impacted by the wars of the early 1990s, the paper focuses on differences in educational performance and income between four groups: migrants, internally displaced persons, former external migrants, and those who did not move. The analysis leverages a municipality-representative survey (n ≈ 6,000) that captured self-reported education and income outcomes as well as migration histories. We find that individuals with greater exposure to conflict had systematically worse educational performance and lower earnings two decades after the war. Former external migrants now living in BiH have better educational and economic outcomes than those who did not migrate, but these advantages are smaller for external migrants who were forced to move. We recommend that policies intended to address migration-related discrepancies should be targeted on the basis of individual and family experiences caused by conflict.

Southeast European and Black Sea Studies, 2021

This paper tests competing hypotheses on the relationship between marginalization and participati... more This paper tests competing hypotheses on the relationship between marginalization and participation in undeclared work. The ‘marginalization’ thesis views undeclared work as conducted primarily by marginalized populations among which young, unemployed and economically fragile people dominate. A competing ‘reinforcement’ thesis argues that undeclared work is conducted disproportionately by those in declared jobs and thus that the undeclared economy reinforces, rather than reduces, the inequalities produced by the declared economy. To evaluate who engages in undeclared work and to test these competing theses, data is reported from a 2015 survey of 6,021 randomly selected adult respondents in Bosnia and Herzegovina. Reporting the marginal effects of a Probit regression analysis, the finding is that marginalized groups (the unemployed, younger age groups, those with fewer years in formal education, lower-income households, rural populations and those from poorer regions) are all significantly more likely to participate in undeclared work. The implications for theory and policy are discussed, along with the limitations of the study and future research required.

Economic Alternatives, 2020

Until now, studies of the relationship between migration and participation in undeclared work hav... more Until now, studies of the relationship between migration and participation in undeclared work have adopted as their unit of analysis the activity of specific migrant groups in their host country. In this paper, a novel approach is pursued by adopting a different unit of analysis. To examine the relationship between migration and participation in undeclared work, the activity of the domestic population in their home country is analysed according to their previous migration activity. To do so, data is reported from a 2015 survey of 6,021 randomly selected respondents aged between 16 and 65 years old in Bosnia and Herzegovina. The finding is that undeclared work is the sole source of earnings for 21% of the total labour force, but for 26% of those who have spent more than three months abroad, 18% of internal migrants and 22% of those who have not migrated either internally or abroad. After controlling for other determinants of undeclared work, a Probit regression analysis finds a significant 8% higher probability of participation in undeclared work for those who have spent time out of the country compared with the non-migrant population. The theoretical and policy implications are then discussed.

Economic Systems, 2020

This is the first study to measure the size and costs of informal networking, quizzing the premis... more This is the first study to measure the size and costs of informal networking, quizzing the premise that informal networks benefit individuals, households and entrepreneurs. On the basis of survey data from the Western Balkans (WB) and empirical analysis, we establish that informal networking, or use of personal contacts for getting things done, has a regular occurrence in the region and its economic cost is substantial. In the structure of networking costs, the costs of invested time dominate over money. Respondents who perceive networking as important and beneficial tend to invest more time and money to maintain their networks. Higher costs are associated with larger networks, which are predominantly built on strong ties. The informal networking costs are also higher for those with better education and income, and in particular for entrepreneurs. Consequently, individuals bear the high costs of informal networking not only for social and culturally determined reasons, but to a large extent for instrumental purposes. Our data suggest that both sociability and instrumentality drive informal networking, which makes it an outcome of both informal constraints (taboos, customs, traditions, and codes of conduct) and inefficient formal rules (constitutions, laws, property rights).

Acta Oeconomica, 2020

This paper investigates how social capital contributes to the pro-social behaviour of individuals... more This paper investigates how social capital contributes to the pro-social behaviour of individuals in a post-conflict environment. I simultaneously investigate the pro-social behaviours in the periods of crisis (floods) and normality and observe whether (structural and relational) social capital has important influences in these two different times. The main novelty of this approach is that I model individuals' pro-social behaviours jointly for both the periods in focus and treat them as systematic outcomes of observed and unobserved (endogenous) influences. I find that more pro-social activities in the normal times are positively associated with such activities in the crisis period. Additionally, the results reveal the importance of (structural) social capital on pro-social behaviour-namely, group membership, size and ethnic structure of individual networks matter. Of particular interest for this post-conflict society and related literature is that greater ethnic diversity of individual networks is supportive for pro-social engagement of citizens. Finally, among the observed economic influences, I find that the respondents working in the informal economy report more pro-social activities while formal employment works more as financial intermediary for these engagements.

This article examines the trust of institutions among internal and external migrant entrepreneurs... more This article examines the trust of institutions among internal and external migrant entrepreneurs in the post-conflict economy of Bosnia and Herzegovina. Drawing on survey data and in-depth interviews, we find that external migrant entrepreneurs with international experience have lower trust in institutions than internal migrants. This is explained by the comparison of institutions in the country of origin with more stable institutional environments they experienced while being abroad. Consistent with this Journal of International Entrepreneurship Summary highlights Contributions: We contribute to institutional theory by examining trust in institutions among external migrants and the internally displaced. The paper finds differences in trust which can be explained by exposure to international environments and the experiences gained among the external migrants. External migrants are exposed to international markets and more stable institutional environments abroad, which changes their perceptions of home. The paper also shows how personal networks have a differential impact on trust, with individuals in more ethnically diverse networks reporting lower trust, demonstrating that institutions are not ethnically neutral. Research question: How do perceptions of institutions compare between internal and external migrants in conflict affected economies? Methodology: Our study focuses on the post-conflict economy of Bosnia and Herzegovina. We use a mixed method approach involving survey data of individuals and in-depth interviews with external migrants and the internally displaced. This allows to combine aggregated data with qualitative in-depth analysis so that both sets of data can be cross-validated and corroborated. Database: This study relies on two databases, including representative survey data from EU Horizon 2020 INFORM project gathered in 2017 (www.formal-informal.eu/home.html) and on the Regional Research Promotion Programe project representative survey data from 2015 (https://seedsdata.unil.ch/project/study-public-overview/153/0/). Results/findings: The results show that international external migrants have lower trust in institutions in comparison to internal migrants. This can be explained by their exposure to other institutional environments and thus adds to research regarding international experience and how it is utilised. Many of the external migrants have been based in Western economies with much more stable institutions, which provide a cognitive contrast with the institutions in the homeland. Our findings also demonstrate how personal networks have a differential impact on perceptions, with individuals embedded in more ethnically diverse networks having lower trust in institutions, which we posit is a result of a fragmented political and institutional system as institutions are often not ethnically neutral throughout the country. Theoretical implications and recommendations for further research: Our study adds to institutional theory by demonstrating differences in institutional trust based on experience of different economic environments. Previous research has examined trust among indigenous entrepreneurs as well as returnees. However, our research takes theory forward through the focus on external and internal migration. Future research could seek to examine external migration and internal displacement associated with different forms of crisis, including economic downturns, political repression and climate change. conclusion, a more complex institutional setup within the country is associated with lower trust in institutions. We also show that personal network diversity has a differential impact on trust, with individuals in more ethnically diverse areas and networks reporting lower trust, reflecting the possibility that institutions are not ethnically neutral and inclusive enough.

Economics, 2018

This empirical study is based on nationally representative cross-sectional survey data gathered t... more This empirical study is based on nationally representative cross-sectional survey data gathered to investigate the effect of ethnic diversity on personal and family incomes in Bosnia and Herzegovina (BiH), a post-conflict society. The 1992–1995 conflict was harmful for ethnic diversity. Yet, two decades later, where it still exists, ethnic diversity gives rise to positive economic consequences. After controlling for other influences, the authors find lower probabilities of respondents in ethnically diverse neighbourhoods being in the lowest income categories but higher probabilities of being in medium and higher income categories. The largest effects are the reduced probabilities of respondents reporting no income, and are thus particularly relevant to poverty reduction. At the limit, their estimates imply an income gap of more than 20 per cent between a counter-factual completely heterogenous environment and a counter-factual completely homogenous environment. Policy makers in this post-conflict country, and in similar environments elsewhere, should take into consideration the economic costs of policies supporting ethnic homogeneity over diversity.

e-Finanse Journal, Poland, 2018

This paper provides insights into the informal economy of Bosnia and Herzegovina (BiH), a post-co... more This paper provides insights into the informal economy of Bosnia and Herzegovina (BiH), a post-conflict transition economy in the Western Balkan region aspiring to became part of the European Union. After the introductory section and literature review, we introduce the economic outlook of BiH and then provide evidence estimating the size of the informal economy, which is identified to be around 30% over the last couple of years. As the size of the informal economy is high and persistent, this implies that current policy approaches are not efficient in tackling this economic challenge. To understand how the informal economy operates in practice, we use data from two different surveys to assess tax morality, undeclared work and the structure of the participants in the informal economy. In the next section, we supplement the study with ethnographic insights. In particular, we identify how participants in the informal economy use it for different purposes and with different motives. This includes reliance on the informal economy as a survival strategy for households, as a way to supplement insufficient formal income, to compensate for economic insecurity, or to decrease costs of formal business by using "envelope wage" practices, but equally importantly to overcome formal institutional rigidities linked to current contradictory laws. Still, we find indications that the growth of informal business is converging to formalisation, as informality at some stages of business development becomes a burden to higher entrepreneurial growth aspirations .

South East European Journal of Economics and Business, 2018

This paper explores the size of the informal economy in Bosnia and Herzegovina (BiH) over the per... more This paper explores the size of the informal economy in Bosnia and Herzegovina (BiH) over the period 1998-
2016, based on an indirect method of measurement known as the MIMIC approach (Multiple Input Multiple
Causes). As the underlying determinants of the informal economy in BiH we include tax burden, the level of
unemployment, the size of the agricultural sector and the level of government subsidies. We estimate that the
average size of the informal economy for the observed period was 34% of GDP, with the largest percentage
in 1998 (43%) and the smallest in 2009 and 2016 (30%). There is a modest decreasing trend in the size of the
informal economy over time. Our model identifies two structural brakes over the observed period. The first
is positive and is linked to the introduction of the value added tax in 2006 (a decrease in 2007-2009 follows).
The second captures a short-run negative effect of the latest global economic crisis in 2009 (an increase between
2010-2011). To further asses these results and check their consistency with available primary data, we
investigate the size of the undeclared work, assess tax morality and the additional income of families coming
from informal sector. These indicators provide consistent results with those of the MIMIC approach.

Sudosteuropa, 2017

We use survey data from Southeastern Europe to investigate determinants which explain thriving an... more We use survey data from Southeastern Europe to investigate determinants which explain thriving and surviving activities of households as their response to the changes caused by the latest global economic crisis of 2007/2008. Contrary to most of the literature that investigates these types of activities as mutually exclusive, our modelling strategy identifies and then focusses on households that have used both of them in the period of crisis. Indeed, the thriving and surviving activities were often used simultaneously and they were mutually related as joint outcomes of a wider system of influences. We identify that both components of household strategies were systematically linked to the economic performance of households and to different dimensions of social capital—generalised trust and informal networking. We also find that different social capital dimensions interact and build in their influence on the success of households—i.e. more engagement in thriving and less in surviving activities.

We explore growth aspirations of young firms' owners and managers in a post-conflict economy by f... more We explore growth aspirations of young firms' owners and managers in a post-conflict economy by focusing on social capital. We treat social capital as a multi-dimensional, multi-level phenomenon; studying the effects: of owners' and managers' discussion networks' characteristics, trust in institutions, generalised trust in people, and local ethnic pluralism. We argue that in a post-conflict country, ethnic pluralism is indicative of local norms of tolerance towards experimentation and risk taking, which supports growth aspirations. We also distinguish between the aspirations of hired managers and owners-managers. Our empirical counterpart and hypotheses testing rely on survey of young businesses in Bosnia and Herzegovina.

Post-communist Economies, 2016

In this study we analyse intentions to emigrate from Bosnia and Herzegovina (BiH), focusing not o... more In this study we analyse intentions to emigrate from Bosnia and Herzegovina (BiH), focusing not only on typical individual and household determinants, but also on post-conflict specific influences. We investigate cross-sectional survey data collected over the period from 2002 to 2010. Our findings indicate that higher intentions for emigration are indeed linked to the typical individual and household
conditions: the young, educated and low-family income respondents report the highest intentions to emigrate. In addition, the post-conflict environment characterised by economic and political instability, as well as by conflict and post-conflict related migration, increases these intentions further, both independently and in different combinations. Although determinants such as employment status, household income and perception of economic development are relevant, their effect is of second-order importance. This contradicts the conventional thinking that economic factors are the main driving forces of emigration intentions. We provide evidence that the conflict and post-conflict related migration experiences, and the political situation, may surpass individual and societal economic influences in importance.

Acta Oeconomica, 2015

This article uses dynamic panel analysis to investigate the relationship between institutional im... more This article uses dynamic panel analysis to investigate the relationship between institutional improvement and economic performance in transition countries. The contribution of this paper is two-fold. First, we find that per capita GDP is determined by the entire history of institutional reform under transition and that, conditional on this history, per capita GDP adjusts to recent institutional changes. Moreover, we find that the time-horizon over which we measure institutional change matters, with five-year changes showing the clearest effects on current levels of per capita GDP. Secondly, we address the pronounced methodological heterogeneity of this literature. To compensate for incomplete theoretical guidance from the institutional literature, we draw upon an institutional meta-regression analysis to inform our model specification. Then we check the robustness of our estimates in a variety of ways: in particular, by a simple variant of extreme bounds analysis, in which model diagnostics are of central importance.

This empirical study is based on nationally representative cross-sectional survey data gathered t... more This empirical study is based on nationally representative cross-sectional survey data gathered to investigate determinants of prosocial behaviour of citizens in Bosnia and Herzegovina (BiH) during the 2014 flood period. To address this we estimate models in which individual characteristics, together with economic and social capital performance are used to explain prosocial activity in the crisis period. We find that women, more educated individuals and those from urban areas were systematically more engaged in helping people in need. We also find that both economic and social capital influences are important predictors of prosocial activity in this period. The better economic performance of individuals – higher income and more wealth – as well as their social capital – group membership, larger and ethnically more diverse networks – explain greater engagement of individuals in the flood crisis. Although the isolated effects of economic and social capital determinants are high, after interacting these influences we find that they also build up and if combined they increase the probability of this engagement. These results are robust across different model specifications.

Southeast European and Black Sea Studies, 2023

Europe-Asia Studies, 2023

Entrepreneurship Theory and Practice, 2022

Post-Communist Economies, 2022

Defence and Peace Economics, 2022

Southeast European and Black Sea Studies, 2021

Economic Alternatives, 2020

Economic Systems, 2020

Acta Oeconomica, 2020

Economics, 2018

e-Finanse Journal, Poland, 2018

South East European Journal of Economics and Business, 2018

Sudosteuropa, 2017

Post-communist Economies, 2016

Acta Oeconomica, 2015

This empirical study is based on nationally representative cross-sectional survey data gathered t... more This empirical study is based on nationally representative cross-sectional survey data gathered to investigate determinants of prosocial behaviour of citizens in Bosnia and Herzegovina (BiH) during the 2014 flood period. To address this we estimate models in which individual characteristics, together with economic and social capital performance are used to explain prosocial activity in the crisis period. We find that women, more educated individuals and those from urban areas were systematically more engaged in helping people in need. We also find that both economic and social capital influences are important predictors of prosocial activity in this period. The better economic performance of individuals – higher income and more wealth – as well as their social capital – group membership, larger and ethnically more diverse networks – explain greater engagement of individuals in the flood crisis. Although the isolated effects of economic and social capital determinants are high, after interacting these influences we find that they also build up and if combined they increase the probability of this engagement. These results are robust across different model specifications.

book, 2019

This book contains collection of articles which provide policy implications related to the proble... more This book contains collection of articles which provide policy implications related to the problem of achieving substantive reform on the basis of harmonising legislation in Western Balkan (WB) countries with the standards of the European Union (EU). While WB states have generally been successful in adopting legal reforms that make up a part of EU conditionality, many laws remain unenforced,
amounting to “empty shells.” In the space between law, as it is written, and practices as they are engaged in everyday life, exists a gap, characterized by informality, clientelism, and exchange often based on strong tie relationships. Some instances of informality undermine the goal of establishing rule law and contribute to corruption. Others offer valuable solutions to persistent social problems or
represent traditional vehicles of social cohesion that should be promoted. The recommendations in this book seek to address both, constructive and damaging instances of informality, and to identify policy measures that can help to harmonise not only legislation, but existing informal practices on the ground.

This interdisciplinary book presents empirical evidence that social capital is an important build... more This interdisciplinary book presents empirical evidence that social capital is an important building block in the reintegration processes, migration challenges and economic dynamism of the SEE communities. Such a conclusion opposes the common belief that (re)establishing social relations in a post-ethnic conflict environment is very difficult. In these societies, trust in people and institutions remains low, but it is often replaced with other forms of social capital emerging on a daily basis, within and between different population strata, either formally but often informally.

This interdisciplinary volume gathers recent work related to the diverse migratory movements in S... more This interdisciplinary volume gathers recent work related to the diverse migratory movements in South-East Europe. The contributions address current aspects of emigration, immigration, transit migration and return from different disciplinary vantage points. They impressively demonstrate that South-East Europe is a highly dynamic migration region marked by a multiplicity of migration-related processes fuelled by global and especially European developments.

We empirically analyze the relationship between ethnic tensions, institutional and economic perfo... more We empirically analyze the relationship between ethnic tensions, institutional and economic performance in Bosnia and Herzegovina (BiH), including a qualitative analysis of this issue for BiH and Macedonia. The research is conducted by a mixed methods approach, in which questionnaire surveys of the household and business sectors in BiH are supplemented by semi-structured interviews. We find that the most important factors affecting both individual economic performance and individual ethnic tolerance in BiH are employment status, education and age; they both singly and in combination move individuals in BiH towards greater probability of being both prosperous and tolerant. The qualitative analysis based on interviews conducted in BiH and Macedonia supports similar conclusions by identifying that the most important factors affecting ethnic tensions include: employment, education, and neighborhood. Finally, the empirical findings from the business survey in BiH suggest that ethnic tensions inherent in company's culture, formal institutions and firm's environment adversely affect the export performance of firms located in these communities.