Participation of Emerging Markets in Global Value Chains (GVCs) and Factors Hindering the Operations of Small and Medium Enterprises (SMEs)

Mohd. Saif Alam

Department of Commerce, University of Lucknow
Lucknow- U.P, India
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Abstract

This paper brings out the importance of the selected emerging markets in the global value chains (GVCs) and the firm level factors that hinders the working of the small and medium enterprises (SMEs) of selected markets, i.e. China, India and Russia. For the purpose of study the participation of the selected countries in GVCs is compared by using OECD WTO Tiva October 2015. For getting an insight, participation of countries is compared with respect to gross exports and imports of intermediate products, domestic and foreign value added (including service). Secondly data at the firm level is taken from World Bank Enterprise Survey database. Comparison is made on the basis of the firm’s perception on the availability of business services for their smooth functioning and finally finding out the extent to which selected factors affects the probability of the firms to export. For arriving at the results Probit regression is applied. The outcome of the econometric exercise suggests that size, foreign ownership, foreign technology, international certification and whether situated in export processing zone/ industrial zone all affects the probability of SME participation in production networks positively except foreign technology which is negative for Indian SMEs .

Keywords: business services, emerging markets, probit regression, production network.
JEL Codes: F15, F23, F42, F68.

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