Abstract We study the “Relocations of Second Degree” (RSDs), i.e., the location decisions that modify the country of destination of a previous offshoring investment. Specifically, we distinguish between two types of RSDs, i.e., “Relocation to the Home Country (RHC)”, also known as back-reshoring, and “Relocation to a Third Country (RTC)”, i.e., the choice to move to a second host country. Specifically, we explore how the location advantages underlying the previous offshoring decision affect the probability to undertake an RHC, rather than an RTC. Location advantages reflect the favourable conditions that a foreign country offers with respect to the home one, in terms of market-seeking, asset-seeking and efficiency-seeking (i.e., cost-saving and productivity-enhancing) opportunities. Using data from the European Restructuring Monitor, we focus on the RSDs regarding manufacturing activities, implemented across European countries between 2002 and 2015. We find that, on the one hand, when a previous offshoring investment is driven by market-seeking location advantage, firms undertaking the RSD are more likely to opt for an RHC, except during the economic crisis where market-seeking European firms seem to prefer RTCs. On the other hand, RTC is a preferred choice when the location advantage is of efficiency-seeking type. In addition to offering a broader characterization of RSDs, our study provides empirical evidence of the relationship between the offshoring and relocation decisions. Managers should be aware of this connection when designing their manufacturing internationalization strategies.
Last. Jan Stentoft(University of Southern Denmark)H-Index: 12
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Abstract This paper describes an empirically derived classification of the various factors that influence offshoring and backshoring decisions based on data from 275 offshoring and 160 backshoring projects. The study developed one set of factor bundles for offshoring and another set of such bundles for backshoring; these sets were then compared, and their relationships with post-relocation benefits were analyzed. These benefits were also grouped into bundles based on the empirical relationships....
Abstract The global nature of businesses has increased the geographical dispersion of operations and has made the location decision an important strategic perspective for manufacturing firms. The consensus view is that three major plant location factors must be kept in mind: (1) access to low-cost manufacturing, (2) proximity to market, and (3) access to development competences. Two options for changing the global manufacturing footprint are offshoring and backshoring. This research has analysed...
Businesses have increasingly engaged in various forms of cross-border transfers of activities. Much production, knowledge and work has been moved offshore from developed economies to achieve better competitiveness. However, recent research has begun to report about an opposite movement, i.e., backshoring of business activities. This research paper reports empirical survey results, exploring and explaining manufacturing relocation from and to three Nordic countries. The purpose was to investigate...
Last. Matteo Vignoli(University of Modena and Reggio Emilia)H-Index: 6
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Purpose The aim of this paper is to analyze and classify research that has been conducted on manufacturing reshoring, i.e. the decision to bring back to the home country production activities earlier offshored, independently of the governance mode (insourcing vs outsourcing). Consequently, the paper also aims at providing avenues for future research and to highlight the distinct value of studying manufacturing reshoring either per se or in combination with other constructs of the international b...
Abstract While research on reshoring generally focuses on the host-country to explain why a company brings its previously offshored activities back home, this paper stresses the relevance also of the home-country context. Specifically, relying on the IMP (Industrial Marketing & Purchasing) perspective we show how offshoring and reshoring processes and decisions are both enabled and constrained by the micro-interactions and interdependencies in the industrial networks stretching over the home-cou...
Last. Marco Sartor(University of Udine)H-Index: 19
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Abstract Motivations underscoring offshoring and backshoring are typically investigated as separate entities in the academic literature. This separation undermines a deeper comprehension of the two phenomena, and implicitly denies the conceptualization of backshoring as a possible step of the firm internationalization process. Our paper seeks to fill this gap by (1) understanding the relations (if any) among offshoring and backshoring motivations at firm level; (2) exploring whether backshoring ...
#2Stefano Elia(Polytechnic University of Milan)H-Index: 20
Last. Lucia Piscitello(Polytechnic University of Milan)H-Index: 29
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This paper investigates whether reshoring of business services is the result of company response to performance shortcomings of the initiative offshored or instead is motivated by persisting with original offshoring strategy (disintegration advantages, accessing new markets and cost-saving), regardless of offshoring performance. Our empirical analysis, based on data from the Offshoring Research Network, shows that both arguments hold. Moreover, when offshoring had been motivated by accessing to ...
#1John V. Gray(Max M. Fisher College of Business)H-Index: 15
#2Gökçe Esenduran(Max M. Fisher College of Business)H-Index: 9
Last. Keith Skowronski(USC: University of South Carolina)H-Index: 4
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Abstract Small to medium-sized enterprises (SMEs) are moving their manufacturing operations from low-cost countries back to high-cost countries, reversing earlier offshoring decisions. These reshoring decisions cannot be completely explained by changing location-related costs. To better understand why SMEs are reshoring, we evaluate nine product-line decisions – six to reshore and three to remain offshore – and codify four empirical observations. We then integrate these observations with relevan...
PurposeThe purpose of this paper is to clarify the rather blurry concept of reshoring and its main drivers and barriers. At the same time, the paper seeks to provide a much-needed overview of the s ...
ABSTRACTThis paper compares the practice of offshoring and backshoring of manufacturing from a supply chain innovation (SCI) perspective. The purpose is to advance the understanding of whether and how companies pursuing different globalisation strategies work differently with the SCI components, technology, and business processes. The results, based on a questionnaire survey in Denmark on relocation of manufacturing, indicate that companies reshoring manufacturing have invested more in manufactu...
Last. Michael Eßig(Bundeswehr University Munich)H-Index: 8
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Abstract null null Much like the immune system of the body, the ‘immune system’ of purchasing and supply management (PSM) is also affected by the Covid-19 virus. Medicine must hinder the spread of the virus and outbreak of disease, just as PSM must prevent risk events and handle supply disruptions. The existing debate on supply resilience and robustness can be demonstrated using this medical analogy. The purpose of this article was to perform a medical check of the ‘PSM immune system’ to identif...
The fast-growing interest in de-internationalization research calls for a comprehensive synthesis of extant literature to identify paths for future research. We have responded to this call with a framework-based thematic review of 218 articles published between 1979 and 2019. The review synthesizes theoretical arguments and empirical findings with the conceptual mapping of four themes: the concept of de-internationalization and its antecedents, consequences, and moderators. This synthesis ensure...
The article concerns the revision of earlier decisions to offshore production activities (so called “relocation of second degree”); more specifically it is focused on the “reshoring” (also referred as “relocation to the home country”, “back-reshoring” or “back-shoring”). The research aims are to investigate what types of mistakes occur along the decision-making and implementation process and how they affect the outcome, in terms of success or failure, of a relocation strategy. A multiple case st...
#1Bella Belerivana Nujen(NTNU: Norwegian University of Science and Technology)H-Index: 3
#2Hans Solli-Sæther(NTNU: Norwegian University of Science and Technology)H-Index: 12
Last. Bianca Hammer(NTNU: Norwegian University of Science and Technology)
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Abstract Drawing on extant literature and eight case firms, this paper explores reputational risk as an essential factor in selecting offshore locations. By categorizing and aggregating insights from the empirical data and the relevant literature, the paper identifies country reputational risk as a factor determining the firm’s propensity to exclude specific offshore locations. However, its effect is contingent upon managers’ interpretation of the critical elements of the business environment in...
#2Lydia Bals(University of Applied Sciences, Mainz)H-Index: 18
Abstract Recently firms have been reconsidering offshoring decisions, and have been reshoring activities back from offshore locations to domestic locations. The aim of this paper is to develop a framework for understanding location and governance choice in the reshoring decision. Employing the eclectic paradigm, the resource-based view and transaction cost economics as a theoretical basis, this research highlights the value of integrating location-specific factors with process- and firm-specific...
The manufacturing sector in the UK is currently undergoing a significant supply chain transformation and managers are re-evaluating supply chain location decisions to minimise the disruptions cause...
After decades of off-shoring strategies, companies are often critically re-evaluating their earlier location decisions; in doing so, sometimes they implement the so-called relocation of second degree. Among them, back-shoring (i.e., relocation to the home country) and near-shoring (relocation to the home region) are two of the alternatives attracting growing interest from scholars. This paper aims to shed new light on the variables influencing the choice made between these two alternatives. As r...
The international fragmentation of production based on the Global Value Chains (GVCs) model has been challenged during last years by several forces such as the macroeconomic changes, the digital transformation, the made-in effect, the rise of nationalisms and trade wars, and the increasing attention for environmental and social sustainability. The Covid-19 is expected to accelerate firms’ relocations and GVCs’ reconfigurations either towards closer locations (i.e. near-shoring) or back to the ho...
While the World is still dealing with the health and safety issues raised by the Covid-19 pandemic, it is already quite apparent – and acknowledged – that this event will have a substantial impact over the national and global economies, as well as on the structure, the organization and the management of operations and supply chains, as highlighted in the June 2020 editorial (Samson 2020). In particular, a certain consensus is found among authoritative experts, analysts, and Institutions (e.g., J...
