Do Institutional Pressures Affect Investment Decisions of Small-Scale Recycling Firms in Tanzania?

Abstract

This paper investigated the effect of institutional
pressures on investment decisions of small-scale
recycling (SSR) firms in Tanzania. The paper
employed Institutional theory to study the effects
of coercive, normative, and mimetic pressures on
three dimensions of investment decisions namely
the choice of specific recycling investments, the
share of recycling investment in the portfolio,
and the level of diversification within the
recycling investment portfolio. The study was
based on 400 randomly selected SSR firms.
Multivariate probit analysis, ordinary least
squares, and ordered logistic regression models
were used on the three dimensions of investment
decision respectively. The study revealed
positive effects of coercive and mimetic
pressures and limited influence of normative
pressure in the choice of specific waste recycling
types. Coercive pressure had a strong positive
influence on the recycling investment share in
the portfolio. It was also found that mimetic,
normative, and coercive pressures have a strong
positive influence on the level of diversification
within the recycling investment portfolio. These
results hold relevance for policymakers and
professionals in the field who seek to promote
diverse and sustainable investment in recycling
within the waste management industry,
considering the complex interactions of
institutional dynamics.