Analysis of Innovation Performance of South- Eastern European Countries in Transition Economies: An Application of the Entropy-Based ARTASI Method

Innovation performance has emerged as a crucial policy concern for nations undergoing institutional change and economic restructuring. Using a novel hybrid multi-criteria decision-making (MCDM) framework, this study assesses the innovation capacities of five transition economies in South-Eastern Europe: Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia. Although the Global Innovation Index (GII) is widely regarded as a comprehensive benchmarking tool, its aggregated scoring system often obscures contextual subtleties, particularly in smaller or less-studied economies. To address these limitations, this study combines the ARTASI ranking model with objective weighting methods—Entropy and CRITIC—providing a transparent, flexible, and reproducible evaluation framework. The results indicate that output-oriented indicators—such as Knowledge and Technology Outputs, Market Sophistication, and Creative Outputs—are the most significant factors in differentiating national innovation performance. Among the analyzed countries, Serbia leads the regional ranking, followed by North Macedonia and Montenegro, while Albania and Bosnia and Herzegovina exhibit notable output-related deficiencies. Robustness checks—including sensitivity analysis and cross-validation with alternative MCDM techniques—confirm the model's stability and reliability. Beyond addressing a geographic gap in the innovation literature, this study offers a methodologically refined approach to innovation evaluation. The proposed framework can serve as a foundation for comparative research in similar socioeconomic contexts and guide evidence-based policymaking in transition economies.