Theory supports two opposing trajectories regarding the effects of trade provisions on micro, small, and medium-sized enterprises (MSMEs) and on their integration into the global value chain (GVC). On the one hand, provisions such as increased competitiveness, networking support, and cooperation provisions enhance firms’ GVC participation. On the other hand, provisions that establish common standards and regulations that increase compliance costs can be burdensome for small enterprises. This paper examines the effect of such MSME-related provisions on participation in GVCs. By merging the World Trade Organization trade agreements and the World Bank Enterprise Surveys datasets, we contribute to the literature in two ways. First, we distinguish between trade-related and non-trade-related provisions. Second, we scrutinize the heterogeneity across sectors, income levels, and regions. Our results show a particularly positive effect of MSME-related provisions, with a larger effect of non-trade-related provisions compared with trade-related ones. In addition, this effect is particularly relevant to low-technology-intensive sectors, low-income countries, and Asian economies. Our results remain consistent when using alternative variables, sample characteristics, and estimation methods.

This paper examines the impact of low-carbon transition risks on sovereign borrowing costs. Using two unbalanced panel datasets covering 125 countries from 1995 to 2019, we estimate extended models of the macroeconomic determinants of short- and long-term sovereign debt costs. We include key indicators capturing exposure to transition risks, such as fossil resource abundance, the carbon intensity of GDP, and the share of renewable energy in total energy consumption. Results show that fossil resource abundance and a higher renewable energy share are associated with lower borrowing costs, whereas greater carbon intensity raises sovereign debt costs. Financial markets therefore appear to reward fossil resource endowments while penalizing carbon-intensive uses of these resources. This reveals a contradictory signal: fossil resource wealth lowers the cost of public borrowing, as it is perceived as a form of implicit collateral, while the actual use of these resources increases borrowing costs, reflecting a carbon risk premium.

This study examines the impact of environmentally oriented investments on firms’ integration into global value chains (GVCs). We use firm-level data in 41 countries from the Business Environment and Enterprise Performance Survey dataset and control for selection and endogeneity bias. Our findings reveal that the adoption of environmental protection actions boosts firms’ participation in GVCs. Measures reducing air pollution, followed by waste minimization techniques and energy management tools, yield the highest impact at both margins. Larger firms are more likely to experience a rise in their chances of participating in GVCs compared to their smaller counterparts. At the sectoral level, dirty sectors (such as plastics, construction and chemicals) are less likely to witness the positive impact of environment-friendly measures on GVC integration, given their production techniques that are CO2 and energy intensive. Finally, at the regional level, the effect of such environmental measures is more pronounced for firms located in European Union countries.