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SMEs’ competitiveness and international trade in the era of Global Value Chains (GVCs) in Tanzania: An assessment and future challenges

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  • Lwesya, Francis

    (Department of Business Administration and Management, University of Dodoma)

Abstract

International trade continues to play a crucial role in economic transformation in African countries. The rise of Global Value Chains (GVCs) presents opportunities through which international trade can be effectively conducted. GVCs facilitate organization of trade, international production and investment by locating different stages of production process across varied countries. This presents opportunities to integrate Small and Medium Enterprises (SMEs) into global trading systems but also may generate challenges particularly to resource constrained SMEs. Reviewing the challenges for the participation in international trade and possible integration into GVCs by Tanzania’s SMEs, the results show that the major challenges for SMEs internationalization are international marketing related constraints and global competition (69%), supply side constraints (56%), unfriendly investment climate (50%) and financial constraints (37.5%). As such, the role of trade policies remains critical in mitigating some of these challenges through formulating friendly legal and regulatory frameworks, enhancing SMEs productivity by building their managerial and technical capacities, minimizing trade costs, and increasing trade openness. However, given the current global, regional and domestic developments in Tanzania, trade policies need review so as to respond to the changing global trade landscape but also promote policy harmony, coherence and complementarities among varying implementing institutions, deficiency of which is debilitating policy implementation at present

Suggested Citation

  • Lwesya, Francis, 2021. "SMEs’ competitiveness and international trade in the era of Global Value Chains (GVCs) in Tanzania: An assessment and future challenges," Small Business International Review, Asociación Española de Contabilidad y Administración de Empresas - AECA, vol. 5(1), pages 325-325, March.
    • Handle: RePEc:aaz:sbir01:v:5:y:2021:i:1:p:e325
    DOI: 10.26784/sbir.v5i1.325
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    References listed on IDEAS

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    1. Lettice Rutashobya & Jan-Erik Jaensson, 2004. "Small firms' internationalization for development in Tanzania: Exploring the network phenomenon," International Journal of Social Economics, Emerald Group Publishing, vol. 31(1/2), pages 159-172, January.
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    Cited by:

    1. Francis Lwesya, 2022. "Integration into regional or global value chains and economic upgrading prospects: an analysis of the East African Community (EAC) bloc," Future Business Journal, Springer, vol. 8(1), pages 1-14, December.
    2. Francis Lwesya & Adam Beni Swebe Mwakalobo, 2023. "Frontiers in microfinance research for small and medium enterprises (SMEs) and microfinance institutions (MFIs): a bibliometric analysis," Future Business Journal, Springer, vol. 9(1), pages 1-18, December.

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    More about this item

    Keywords

    SMEs; global value chain (GVC); trade policies; international trade; SMEs competitiveness;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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