Road Infrastructure Resilience and SMEs Sales Performance in Tanzania: Evidence from the Government Departments Shift to Dodoma Region

Abstract

This study focuses on the effect of road transport infrastructure in Dodoma city on Small and Medium Enterprises (SMEs) sales performance. Specific attention was to determine how several factors, such as market and road accessibility, ways of transportation, time management, and so forth, affect sales performance (measured by sales trend) of SMEs after Government Departments Shift to Dodoma Region. The data from Using the World Bank firm resilience and enterprise survey was employed to analyze 89 firms by using DiD technique to capture the outcome before and after the shift. The main variables, such as market accessibility, access roads to customers, improved transportation, and time management, positively affect sales performance. The results mean that the infrastructure constructed after the Government shift dramatically increases the sales volume. The other variables (ways of transporting goods, shifting to transport mode, transport cost, and expensive transport model) indicate the adverse effect. In addition, the study showed robust checks on the OLS model and profit as another measure of firm performance. The results indicate a similar effect to the baseline results, with a slight increase when the control variables are inserted into the model. The study concludes that transport infrastructure improved or constructed after the Government shift to Dodoma city boosted the sales and profit of SMEs. The paper recommends that the Government should continue improving road networks. Also, financial skills should be offered to SMEs. Through acquired skills, they can make knowledgeable investment decisions and develop entrepreneurial skills that will allow them to identify and adventure the available commercial opportunities.