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FIRM-LEVEL HIRING DIFFICULTIES IN MANUFACTURING SMEs: THE ROLE OF WORKFORCE MIGRATION, FIRM CHARACTERISTICS, AND GROWTH EXPECTATIONS

Author

Listed:
  • Agon Dula

    (South-East European University, Faculty of Business and Economics, North Macedonia)

  • Besnik Krasniqi

    (University of Prishtina, Faculty of Economics, Kosovo)

Abstract

Skilled workforce shortages pose a significant challenge to the growth and development of small and medium-sized enterprises (SMEs), particularly in transition economies like Kosovo. This study examines the impact of workforce migration, firm characteristics, and growth expectations on hiring difficulties faced by manufacturing SMEs. Using a probit binary choice model, the research explores how employee migration, firm growth ambitions, and training practices affect the likelihood of firms encountering difficulties in filling vacancies for skilled labor. Data from a sample of 217 randomly selected manufacturing firms in Kosovo, drawn from the Database of Active Taxpayers, forms the basis of the analysis. The findings reveal that firms experiencing employee migration and those with growth ambitions are more likely to struggle with recruitment, particularly when investing in employee training. Conversely, exporting firms report fewer hiring challenges. The study offers several managerial and policy recommendations to mitigate skills shortages and improve recruitment outcomes in Kosovo's SMEs.

Suggested Citation

  • Agon Dula & Besnik Krasniqi, 2025. "FIRM-LEVEL HIRING DIFFICULTIES IN MANUFACTURING SMEs: THE ROLE OF WORKFORCE MIGRATION, FIRM CHARACTERISTICS, AND GROWTH EXPECTATIONS," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 34(1), pages 3-22, june.
    • Handle: RePEc:avo:emipdu:v:34:y:2025:i:1:p:3-22
    DOI: 10.17818/EMIP/2025/7
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    Keywords

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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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