Size, Geography, and GVC Participation of Firms in 10 Southeast Asian Countries: Implications for the RCEP

Abstract

This study examines the factors influencing the participation of enterprises in global value chains (GVCs) within the Southeast Asian region, with a particular focus on the relationship between firm size, geographic factors, and the impact of the Regional Comprehensive Economic Partnership (RCEP). Based on data from the World Bank’s survey across 10 ASEAN countries, the study reveals that large enterprises have significant advantages in joining GVCs due to their financial resources, advanced technologies, and skilled labor. Meanwhile, small and medium enterprises (SMEs) face greater challenges but still have opportunities to participate if they can leverage technological innovation and digital transformation. Additionally, geographic location plays a crucial role, as businesses in major urban centers with developed infrastructure tend to access GVCs more easily compared to those in rural areas or regions with weak infrastructure. RCEP offers numerous opportunities, such as tariff reductions and enhanced regional trade connectivity, but effectively utilizing these opportunities depends on the capabilities of individual enterprises and the policy support provided by member countries. The study also highlights disparities in GVC participation across enterprises and countries within ASEAN and proposes several solutions, including investing in technology, improving logistics infrastructure, providing financial support for SMEs, and capitalizing on the benefits of RCEP. This research aims to provide a foundation for policies that support deeper enterprise participation in GVCs, thereby fostering economic growth and regional integration in Southeast Asia