1. Arnela Nanić, Univerzitet u Bihaću, Ekonomski fakultet, Federation of Bosnia and Herzegovina , Bosnia and Herzegovina

There are numerous factors that are crucial for the development of the domestic market and the local economy in general. In this paper, emphasis is placed on the purchasing power of the population as well as the attitude of consumers that are generally negative towards local entrepreneurs, as well as to their products and services.Some of the biggest barriers that hinder the development of SMEs in Bosnia and Herzegovina are:excessive involvement of policies, high levels of corruption, legal and regulatory barriers, lack of financial resources, lack of entrepreneurial knowledge (...). Also, this paper presents and analyzes the consumer’s attitude to the domestic companies (consumer ethnocentrism) which is directly related to demographic characteristics, such as age, education structure and level of income. The paper will interpret the results of a study conducted in the Una-Sana Canton using a questionnaire. The results of research have confirmed that the majority of consumers give preference to local products when shopping, however only if they are of highest quality and cost competitive with imported products. In addition, studies have shown that in patients with different demographic characteristics, there are different degrees of ethnocentric tendencies. All this has a major influence to the development of domestic enterprises, and consequently the development of the whole economy. The research was conducted using the survey because it is the best way to gather qualitative and quantitative data on attitudes, preferences and behavior in purchasing. I have also used a structured questionnaire with a formal list of questions. The method of contacting respondents was done through personal interviews (face to face method). The questionnaire consisted of a total of 22 questions open and closed type. Random sampling method has been used. The sample size is 200 (n = 200) subjects. Population covered by this study was related to the population of the Una-Sana Canton older than eighteen (18) years. Sampling frame is made on the basis of estimates of the population by data from Federal Institute of Statistics, and the Statistical Institute of Una-Sana Canton.

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