Internationalization Through Global Value Chains and Innovation: The Case of Greek SMEs

This chapter provides novel empirical evidence on the internationalization of Greek SMEs through the lens of global value chain (GVC) participation, and its relationship with their innovation performance. To do this, we utilize a unique dataset of 950 (mainly manufacturing) SMEs from an extensive field survey on various sectors and regions of the Greek economy in 2019. Through this dataset, we provide preliminary evidence on a strong link between GVC participation and innovation performance of Greek SMEs, which is robust to different innovation proxies. In addition, we provide a novel investigation of the perceived strengths that facilitate GVC participation for Greek SMEs, and we find that most firms that consider specialized knowledge, product quality, and product adjustment capabilities as the major factors that support their GVC participation have usually introduced at least one innovation of any type in the two-year period before the survey. The empirical findings provide fruitful implications for policies supporting internationalization and innovation for Greek SMEs, a policy domain that lies at the heart of both Greece’s and the EU’s current industrial strategy.