This study investigates how cultural diversity affects entrepreneurship in the Western Balkans. We obtain insights into the complex dynamics by looking at variables like ethnic composition, language variety, and religious diversity, in conjunction with economic, institutional, and sociocultural issues. Additionally, we assess entrepreneurial activity including the number of new businesses started. Sociocultural factors, including social norms toward entrepreneurship, risk attitudes, and gender equality, are considered to uncover their influence on entrepreneurial behavior. Lastly, we focus on economic indicators of Western Balkans including GDP per capita, unemployment rate, and income inequality to provide context for their economic activity. This study underlines the significance of local environment and regional differences in fostering social integration and economic prosperity in Western Balkans. The results are useful for research, entrepreneurship, and policymaking. This study provides a comprehensive analysis of the relationship between cultural diversity and entrepreneurship in the Western Balkans, considering contextual factors and variations across countries. It sheds light on the importance of cultural diversity for entrepreneurial activity and offers actionable insights for various stakeholders.