Manufacturing back-reshoring and the firm’s internationalization process

Over the past few years, the use of terms such as “on-shoring”, “re-shoring”, “home-shoring”, and “back-shoring” has multiplied dramatically, especially in economic journalism and in consulting firms’ white papers. In turn, policy-makers have seen back-shoring strategies as ways to bring jobs back home during the global crisis. The topic has attracted academic attention (mainly in the Supply chain management field of study), but reliable and quantitative evidence on the extent of the back-shoring phenomenon is scant and often of anecdotal nature. Moreover, the characterisation of this evidence, as well as its role within the firms’ internationalisation process, remains unclear. In this paper we adopted an explorative approach building on both theoretical and empirical literature from the fields of International Business and International Operations Management. The first aim of the paper is to offer a characterisation of back-reshoring as a possible step of the firm’s internationalisation strategy and to identify the differences (if any) with other phenomena, such as “de-internationalisation”, “international divestment” and “return relocation”, already analysed by international business and international operations management scholars. The second aim of the paper is to review the empirical literature on back-reshoring and to complement it with the findings of an extensive data collection. Firms’ motivations for back-reshoring emerging from this evidence are interpreted in the light of existing theories of internationalisation, and used to propose a set of research questions for scholars to tackle. Results confirm what has been heard anecdotally: logistic issues, rising costs in offshore locations, automation, quality issues inside the global supply chain, and the realization of the advantages of proximity to markets are all at the root of location strategies that tend to be regional rather than global. Finally, open issues are identified and opportunities for future research are suggested. Our findings confirm that, though it cannot be considered a generalised trend, back-reshoring is a very topical issue, not the least because of its social and political implications. To date, the topic remains largely unexplored, and longitudinal research is required to address our research questions and other issues that can help with understanding and predicting successful location decisions.