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

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 revealedpositive 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.