Regionalism　in　Asia,　driven　by　global　value　chains　(GVCs)　and　Economic　Corridors　has　significantly　put　the　attention　on　small　and　medium-sized　companies　(SMEs)　(SMEs).　In　Pakistan,　SMEs　Development　is　a　fascinating　case　study.　Government　and　businesses　are　considerably　involved　in　GVC　trade　and　aggressively　pushing　liberalization　through　many　routes,　including　through　the　China　Pakistan　Economic　Corridor　(CPEC).　This　research　will　address　important　issues　that　will　help　to　strengthen　the　link　between　SME　development　and　GVC.　Is　GVC　involvement　enabling　SMEs　to　get　benefits　that　would　be　unavailable　to　them　otherwise?　How　collaboration　alliances　enhance　participation　of　GVC?　Which　firm　characteristics　are　likely　to　influence　SME　involvement　in　GVC?　The　analysis　uses　the　augmented　production　function　to　analyze　the　effects　of　GVC　participation　on　SME　performance　and　a　probit　model　to　identify　the　determinants　of　SME　participation　in　the　GVC.　There　is　strong　evidence　that　GVC　has　a　beneficial　effect　on　SME　profits,　and　it　remains　a　promising　channel　for　the　development　of　SMEs　in　Pakistan.　GVC　has　a　statistically　significant　effect　on　SME　profit.　Additionally,　the　empirical　findings　indicate　that　the　size　of　the　firm,　employee　training,　collaboration　alliances　and　direct　exports　of　SMEs　all　play　a　significant　role　in　determining　their　likelihood　of　participating　in　GVC.　©　2021　ACM.