Effects of Firm Characteristics on Portfolio Diversification in Recycling: Evidence from Small-Scale Recycling Firms in Tanzania

This study examines the effects of firm-specific characteristics on both the share of recycling investment in firms’ overall portfolios and the level of diversification within recycling investments among small-scale recycling (SSR) firms in Tanzania. Using cross-sectional data collected from 400 SSR firms across five municipalities in Dar es Salaam, the study employs multiple linear regression and ordered logistic regression models for analysis. The findings reveal that firm age has a positive and statistically significant influence on both the proportion of recycling investment and the degree of diversification within recycling portfolios. These results suggest that accumulated experience and ownership structure play more critical roles in shaping sustainable investment behavior than firm scale among SSR firms. The study revealed valuable insights for policymakers, industry stakeholders, and small-scale recyclers seeking to strengthen portfolio diversification, promote sustainable investment practices, and accelerate the transition toward a circular economy in Tanzania.