Institutional Constraints and Pressure on Small Enterprises: An Analysis of the Automotive Service Sector in a Transitional Economy

This peer-reviewed research article examines the institutional constraints affecting small enterprises in the automotive service sector in transitional economies. The study analyzes how regulatory, administrative, procedural, and informal factors shape business activity and influence the internal structure and resilience of small enterprises. The article introduces a structured typology of institutional constraints and explores the mechanisms through which external pressures are transformed into internal operational imbalances. Particular attention is given to the interaction between formal regulations and informal practices, as well as to the concept of institutional asymmetry, which reflects unequal access to resources and protection mechanisms for small businesses. The research demonstrates that institutional factors affect enterprises not only at the level of costs and compliance, but also through changes in operational processes, procurement systems, customer relationships, and managerial decision-making. External influences are shown to propagate through interconnected components of the enterprise, producing cumulative and systemic effects. Special emphasis is placed on behavioral adaptation strategies developed by entrepreneurs under conditions of uncertainty. These strategies include limiting business visibility, reducing expansion, reallocating resources, and prioritizing operational stability over growth. The study highlights the trade-off between resilience and development, showing that adaptation mechanisms often ensure survival but may constrain long-term expansion. The findings suggest that small enterprises in transitional economies should be understood as adaptive institutional systems whose behavior is shaped by both market forces and the structure of the institutional environment. The study contributes to research on institutional economics, small business development, and entrepreneurial adaptation under conditions of regulatory uncertainty. The version deposited in Zenodo corresponds to the peer-reviewed scholarly publication and reflects the author’s original research without substantive modification.