The Role of Linkages in Determining Informal And Small Firms’ Performance: The Case of the Construction Industry in Tanzania

Esther Ishengoma, Razack Lokina

Abstract


Despite their significant contribution to employment and to the economy in general, the performance of informal and small construction firms is still low; and has been associated with limited human and working capital, poor technology, limited access to differentiated markets and productive resources. Among the addressed options to overcome these problems is by linking them to relatively large contractors.Empirical studies which have associated the performance of these firms to linkages are unable to show the extent to which linkages explain the performance. While controlling for selected firms’ factors, this paper tries to examine the role of linkages in explaining the performance of firms. The results reveal that firms with reliable customers and access to organisational subcontracting arrangements perform better than their counterparts.


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