TF3 Trade, Investment and Growth
MSMES’ ACCESS TO GLOBAL VALUE CHAINS AND TRADE FINANCE

ABSTRACT

In the Riyadh Declaration (G20, 2020), G20 leaders declared they intend to promote “inclusive economic growth including through increased participation of micro-, small-, medium-sized enterprises (MSMEs) in international trade and investment”. MSMEs account for the majority of businesses worldwide and are crucial contributors to job creation. Yet they tend to be less productive and more vulnerable to crises than large enterprises. Being better integrated into global value chains is a potential strategy for these firms to access more markets and improve their productivity. Due to differences in their nature, while partnering with large companies is a potential strategy for small and medium-sized companies (SMEs), micro-enterprises may benefit from linking with SMEs. Member states should, therefore,address the following challenges: a) facilitate the access of MSMEs to information, opportunities, and potential partners, particularly transnational companies; and b) expand trade finance instruments for MSMEs. As a practical solution, we recommend the launch of the Link20 Initiative.

AUTHORS

Jennifer Castaneda-Navarrete
University of Cambridge

Rajeev Kher
Research and Information System for Developing Countries (RIS)

Carlos López-Gómez
University of Cambridge

Arun. S. Nair
Research and Information System for Developing Countries (RIS)

Saon Ray
Indian Council for Research on International Economic Relations

Adnan Seric
United Nations Industrial Development Organization (UNIDO)

Yee-Siong Tong
University of Cambridge

Ligia Zagato
United Nations Industrial Development Organization (UNIDO)

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