IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v12y2024i5p100-d1382665.html
   My bibliography  Save this article

The Manufacturing Reshoring Phenomenon: A Policy-Oriented Analysis of Factors Driving the Location Decision

Author

Listed:
  • Xavier Bornert

    (Centre for Research on Geography, Resources, Environment, Energy and Networks (GREEN), Bocconi University, Via Roentgen 1, 20136 Milan, Italy)

  • Dario Musolino

    (Centre for Research on Geography, Resources, Environment, Energy and Networks (GREEN), Bocconi University, Via Roentgen 1, 20136 Milan, Italy)

Abstract

For several decades, multinational enterprises (MNEs) have offshored their manufacturing activities to low-cost countries to achieve significant productivity gains. However, changes in the relative competitiveness of countries, social effects of deindustrialization in advanced economies and the vulnerability of global value chains (GVCs) revealed by the COVID-19 pandemic have encouraged some firms, supported by governments, to “reshore” part, or all of their offshore industrial operations back to their home country. Reshoring decisions are motivated by a variety of endogenous and exogenous factors that are empirically analyzed in this paper to understand how reshoring policies implemented by governments can more effectively address the factors driving the firms’ location decisions. A review of the reshoring policies implemented in Europe, the UK and the US is conducted to provide general policy recommendations regarding policy instruments, SMEs, innovation and regionalization of value chains. This paper fills a gap in the literature by connecting the micro-level supply chain management analysis of firms’ reshoring drivers with the macro-level economic policy perspective on reshoring. The review of existing reshoring policies calls for an in-depth analysis by the manufacturing sector and at the local level.

Suggested Citation

  • Xavier Bornert & Dario Musolino, 2024. "The Manufacturing Reshoring Phenomenon: A Policy-Oriented Analysis of Factors Driving the Location Decision," Economies, MDPI, vol. 12(5), pages 1-19, April.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:5:p:100-:d:1382665
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/12/5/100/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/12/5/100/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fel Fabienne & Griette Eric, 2017. "Near-reshoring your supplies from China: a good deal for financial motives too," Post-Print hal-01503218, HAL.
    2. Bettiol, Marco & Burlina, Chiara & Chiarvesio, Maria & Di Maria, Eleonora, 2017. "From Delocalisation to Backshoring? Evidence from Italian Industrial Districts," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 39, pages 137-154.
    3. Alan S. Blinder, 2007. "Offshoring: Big Deal or Business as Usual?," Working Papers 2007-6, Princeton University. Economics Department..
    4. Stefano Elia & Luciano Fratocchi & Paolo Barbieri & Albachiara Boffelli & Matteo Kalchschmidt, . "Post-pandemic reconfiguration from global to domestic and regional value chains: the role of industrial policies," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    5. Claire Joubioux & Evelyne Vanpoucke, 2016. "Towards right-shoring: a framework for off-and re-shoring decision making," Operations Management Research, Springer, vol. 9(3), pages 117-132, December.
    6. Pamela K. Robinson & Linda Hsieh, 2016. "Reshoring: a strategic renewal of luxury clothing supply chains," Operations Management Research, Springer, vol. 9(3), pages 89-101, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. McIvor, Ronan & Bals, Lydia, 2021. "A multi-theory framework for understanding the reshoring decision," International Business Review, Elsevier, vol. 30(6).
    2. Fernando Merino & Cristina Di Stefano & Luciano Fratocchi, 2021. "Back-shoring vs near-shoring: a comparative exploratory study in the footwear industry," Operations Management Research, Springer, vol. 14(1), pages 17-37, June.
    3. Piatanesi, Benedetta & Arauzo Carod, Josep Maria, 2019. "An Analysis about reverse offshoring," Working Papers 2072/376030, Universitat Rovira i Virgili, Department of Economics.
    4. Paolo Barbieri & Albachiara Boffelli & Stefano Elia & Luciano Fratocchi & Matteo Kalchschmidt & Danny Samson, 2020. "What can we learn about reshoring after Covid-19?," Operations Management Research, Springer, vol. 13(3), pages 131-136, December.
    5. Henkel, Malin & Boffelli, Albachiara & Olhager, Jan & Kalchschmidt, Matteo, 2022. "A case survey of offshoring–backshoring cases: The influence of contingency factors," International Journal of Production Economics, Elsevier, vol. 253(C).
    6. Amy V. Benstead & Mark Stevenson & Linda C. Hendry, 2017. "Why and how do firms reshore? A contingency-based conceptual framework," Operations Management Research, Springer, vol. 10(3), pages 85-103, December.
    7. Stentoft, Jan & Mikkelsen, Ole Stegmann & Jensen, Jesper Kronborg & Rajkumar, Christopher, 2018. "Performance outcomes of offshoring, backshoring and staying at home manufacturing," International Journal of Production Economics, Elsevier, vol. 199(C), pages 199-208.
    8. Młody Michał & Stępień Beata, 2020. "Principles of reshoring development in luxury goods sector," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(2), pages 140-158, June.
    9. Paolo Barbieri & Clio Dosi & Matteo Vignoli, 2023. "Implementing reshoring: insights and principles from a longitudinal case study in the e-bike industry," Operations Management Research, Springer, vol. 16(2), pages 555-573, June.
    10. Bart Kamp & Juan José Gibaja, 2021. "Adoption of digital technologies and backshoring decisions: is there a link?," Operations Management Research, Springer, vol. 14(3), pages 380-402, December.
    11. Mohamed M. Dhiaf & Osama F. Atayah & Nohade Nasrallah & Guilherme F. Frederico, 2021. "Thirteen years of Operations Management Research (OMR) journal: a bibliometric analysis and future research directions," Operations Management Research, Springer, vol. 14(3), pages 235-255, December.
    12. Movin Sequeira & Anders Adlemo & Per Hilletofth, 2023. "A hybrid fuzzy-AHP-TOPSIS model for evaluation of manufacturing relocation decisions," Operations Management Research, Springer, vol. 16(1), pages 164-191, March.
    13. Luciano Fratocchi & Julia Mayer, 2023. "The impact of environmental and social sustainability on the reshoring decision making and implementation process: insights from the bicycle industry," Operations Management Research, Springer, vol. 16(2), pages 574-593, June.
    14. Albachiara Boffelli & Malin Johansson, 2020. "What do we want to know about reshoring? Towards a comprehensive framework based on a meta-synthesis," Operations Management Research, Springer, vol. 13(1), pages 53-69, June.
    15. Młody Michał & Stępień Beata, 2020. "Principles of reshoring development in luxury goods sector," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(2), pages 140-158, June.
    16. Nicole Litzel & Joachim Möller, 2011. "Industrial Clusters and Economic Integration: Theoretic Concepts and an Application to the European Metropolitan Region Nuremberg," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume II, chapter 12, Edward Elgar Publishing.
    17. Nina Edh Mirzaei & Per Hilletofth & Rudrajeet Pal, 2021. "Challenges to competitive manufacturing in high-cost environments: checklist and insights from Swedish manufacturing firms," Operations Management Research, Springer, vol. 14(3), pages 272-292, December.
    18. Patrizia Casadei & Simona Iammarino, 2021. "Trade policy shocks in the UK textile and apparel value chain: Firm perceptions of Brexit uncertainty," Journal of International Business Policy, Palgrave Macmillan, vol. 4(2), pages 262-285, June.
    19. Huiwen Gong & Robert Hassink & Christopher Foster & Martin Hess & Harry Garretsen, 2022. "Globalisation in reverse? Reconfiguring the geographies of value chains and production networks [Does Covid-19 Spark the End of Globalisation?]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(2), pages 165-181.
    20. Gerda Dewit & Holger Görg & Yama Temouri, 2013. "Employment Protection and Relocation with Firm Heterogeneity," Economics Department Working Paper Series n234-13.pdf, Department of Economics, National University of Ireland - Maynooth.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:12:y:2024:i:5:p:100-:d:1382665. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.