Joint Ventures for SMEs Competitiveness and Inclusive Growth: A Comparative Analysis of SMEs in Mbeya, Tanzania

Abstract

The inclusive growth of SMEs has recently gained much recognition from scholars and policymakers. However, the pertinent question is, what is the best approach toward SME growth? This article examines the effects of Joint Venture (JV) undertaking on SMEs’ competitiveness and inclusive growth in Tanzania’s business setting. 192 (87 JV firms and 105 sole proprietors) were sampled from Mbeya City, Tanzania using a stratified systematic sampling technique for analysis. Data was collected using the survey method. The effects of JV on the SMEs’ competitiveness and growth were established by the pattern of percentages and the level of significance (p-values) using the independent t-test. It was found that SMEs operating as JV were more competitive, with a higher ability to meet financial, cost, quality, innovation, time and market requirements compared to sole proprietors. Nevertheless, JV firms revealed higher significant growth indicators in terms of sales volume, profit margin, market share, number of employees, working assets, production volume and business diversification than sole proprietors. Limited financial resources, inadequate production facilities, limited experience, unfavourable trade laws and socio-cultural factors constrain SMEs from JV undertaking. To policymakers and scholars, this article highlights the role and the determinants of JV undertakings as an important approach toward improved SMEs’ competitiveness and inclusive growth. Keywords: Joint ventures, SMEs’ competitiveness, inclusive growth, Mbeya-Tanzania