Impact of Global Value Chain on the Performance of SMEs

Abstract

Global Value Chain (GVC), The full range of activities (design, production, marketing, distribution, and support to the final consumer, etc.) that are divided among multiple firms and workers across geographic spaces to bring a product from its conception to its end use and beyond. Most of the countries in south Asia and southeast Asia such as Sri Lanka, Vietnam, Indonesia, Philippines, Malaysia, India, and Bangladesh economics depend on the GVC’s participation. Especially the production and service sector in the Small and Medium Enterprises of each country has linked with the GVC. Small and Medium – size enterprises (SME) have played a major role in the country's economy and it is the country’s backbone. Therefore, if some factors affecting the SME sector it is also directly affected positively or negatively to the relevant country’s economic developments. Considering the latest studies and research, the impact of the Global value chain on the performance of SME’s, we identified negative and positive relations with the SME sector of the Asian region countries. Here in this paper, we analyzed the five research papers published by the Asian Development Bank in 2021 about how the global value chain impacts Small and Medium – size businesses in the countries of Indonesia, Vietnam, Sri Lanka, and Thailand.