Climate change and agribusiness entrepreneurship in Tanzania: The mediating role of adaptation strategies

Abstract

Agribusiness entrepreneurship in Tanzania operates within a climate-vulnerable agricultural economy in which rising temperatures, erratic rainfall and recurrent extreme weather events threaten production and business continuity. However, the mechanism through which climate change is transmitted into entrepreneurial outcomes specifically the role played by adaptation strategies remains empirically under examined in the Tanzanian context. This study therefore pursued two objectives: (i) to examine the direct effect of climate change on agribusiness entrepreneurship, and (ii) to assess the mediating role of adaptation strategies in this relationship, drawing on Dynamic Capabilities Theory to frame adaptation strategies as capability-building responses to environmental disruption. A quantitative, cross-sectional design was employed to collect primary data from 252 agribusiness entrepreneurs (smallholder farmers, small and medium enterprises, and start-ups) in Morogoro and Dodoma regions, selected through stratified random sampling. Data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The measurement model satisfied recommended thresholds for indicator reliability, internal consistency, convergent validity and discriminant validity. The structural model revealed that climate change had a significant negative direct effect on agribusiness entrepreneurship (β = -0.143, t = 3.192, p = 0.001) and a significant positive effect on adaptation strategies (β = 0.335, t = 3.559, p < 0.001); adaptation strategies, in turn, exerted a strong positive effect on entrepreneurship (β = 0.922, t = 40.643, p < 0.001). The bootstrapped indirect effect of climate change on entrepreneurship through adaptation strategies was positive and significant (β = 0.309, t = 3.331, p = 0.001), confirming partial mediation. These results indicate that although climate change constrains agribusiness entrepreneurship directly, its net effect depends substantially on entrepreneurs' capacity to adopt adaptive practices that convert climate pressure into resilience and performance. The study extends Dynamic Capabilities Theory to agribusiness entrepreneurship in a developing-economy setting and provides evidence to support policies that strengthen access to climate-resilient technologies, extension training and adaptation finance for agribusiness entrepreneurs, particularly smallholders, women and youth.