Mapping the participation of ASEAN small- and medium- sized enterprises in global value chains

Javier Lopez Gonzalez

No 203, OECD Trade Policy Papers from OECD Publishing

Abstract: Participation in global value chains (GVCs) can be a pathway for economic development. It is associated with growing productivity, exporting more sophisticated products and a less concentrated export basket (Kowalski et al., 2015). However, it is often argued that these benefits accrue mainly to larger firms and/or multinationals, leaving small and medium sized enterprises (SMEs), which tend to employ the largest share of workers, struggling to benefit from the opportunities offered by the evolving GVC landscape. This paper identifies how SMEs in ASEAN economies participate in GVCs by combining firm level data with the Trade in Value Added (TiVA) database. SMEs in the region might face more constraints than large firms in sourcing competitive inputs, limiting their ability to benefit from GVCs, as indicated by the lower share of foreign value added in their exports. That said, SMEs also tend to export intermediate goods to GVCs either directly, or, importantly, indirectly, through sales to larger domestic or multinational firms which then export. Policies seeking to integrate SMEs into GVCs could aim to address importing constraints through continued unilateral or regional liberalisation or sustained support for trade facilitation and connectivity. At the same time programmes aimed at promoting domestic and international production linkages should allow SMEs to better identify new opportunities and exploit their comparative advantage in the production of intermediate goods and services and integrate, directly or indirectly, into regional and global value chains.

Keywords: globalisation; GVCs; importing; indirect exporting; SMEs; Southeast Asia; trade (search for similar items in EconPapers)
JEL-codes: D22 D24 F13 F14 F15 F63 F68 L11 L23 L25 (search for similar items in EconPapers)
Date: 2017-06-23
New Economics Papers: this item is included in nep-int, nep-sbm and nep-sea
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:203-en

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