SME Internationalization through global value chains and free trade agreements: Malaysian evidence
This paper (PDF) by the Asian Development Bank Institute examines the characteristics of SMEs in in global value chains (GVCs) and free trade agreements (FTAs) and explores the policy implications. It finds that among SMEs, firm size matters for participation in GVCs and FTAs. But size is not the whole story for SME internationalization. Licensing of foreign technology and investment in research and development are also positively associated with SMEs joining GVCs. Furthermore, increased exposure to international trade, knowledge of FTA provisions and central location positively affects the use of FTAs by SMEs. More business support for SMEs can help them to engage in GVCs and FTAs. For more information, this study by APEC suggests some policy principles and best practices to increase the chances for SMEs to play an important role in GVCs.