In the article we analyzed behavior of the entrepreneurs and self-employed on Kosovo. Results show that in case of very limited occupational choice, decision for self-employment does not lead necessarily to the development of entrepreneurship. As such, self-employment in less developed transitional countries can less likely serve as a base for the development of entrepreneurship. Therefore it is apparent that the role of government is to foster the introduction of more occupational choices by providing the opportunity (support) to gain employment in large, medium or growing small companies.
The comparison between the Montenegrin firms that survived privatization and the firms that did not reveals that large firms are more likely to survive. Firms with more mortgaged property are less likely to survive. The results of the bargaining model show that survivor firms are closer to the Ward-Domar-Vanek income per worker hypothesis. Results of the bargaining model for the period 2004-2008 show, that de-novo firms are on the border which describes profit maximizing behavior of firms, while firms from the privatization process are much closer to income per worker maximization behavior.