Small and Medium Enterprises in Global Value Chains: Insights from Theoretical Perspectives

The paper's objectives and research backgroundGlobal value chains are often considered the lead story of trade in the modern world, with an estimated 80 percent of international trade occurring through them.Small and medium enterprises (SMEs) are vital in integrating GVCs, contributing to economic growth and innovation.They are estimated to account for between 80-99 percent of firms in any given country and between 60-70 percent of global employment.Regardless of the nebulous way SMEs are defined, they are not well represented in international trade and GVCs worldwide.The paper summarizes knowledge about SMEs position in global trade based on available thematic resources.The importance and spillovers for SMEs participating in GVCs are named, addressing the obstacles small and medium enterprises face while participating in international trade relations. Data/MethodsThe study summarizes available literature on small and medium enterprises participation in global value chains.It uses a qualitative content analysis method to work with the basic definitions, followed by describing the current state of small and medium enterprises in global trade in European and Asian regions and the different obstacles SMEs face regarding participation in international trade.Results/Conclusions/Value added.The study defined that regardless of the ratio of SMEs compared to large firms, they could be better represented in international trade and GVC worldwide.Existing research claims that the smaller the company, the less export-oriented it is.The Eurostat database shows that only 41% of small companies participate in international trade, while the participation ratios of medium and large enterprises are 67% and 93%, respectively.Possible reasons for such situations were analyzed, defining obstacles small and medium enterprises can have regarding participating in global trade.