“…The aforementioned determinants, both demand and supply side, are relevant for all countries, however, in transitioning economies, their impact on growth and sometimes the vector of a business's development is determined by the features of the institutional environment. The body of empirical research on SME performance in developing economies found a robust relationship between firm performance and the quality of institutions [Aidis et al, 2008;Molz et al, 2009;Blagojevic, Damijan, 2013;Sharafutdinova, Kisunko, 2014;Yukhanaev et al, 2015;Volchek et al, 2013a,b;Wang, You, 2012;Krasniki, Desai, 2016;Welter, Smallbone, 2011]. However, the mechanism behind their interactions remains poorly studied.…”