Abstract
Despite the high degree of attention that re-shoring has recently attracted in the media, we lack detailed understanding of the drivers of such an important strategic change by a multinational enterprise (MNE). We offer the first large-scale analysis of the factors that influence a firm's decision to re-shore. Our analysis is based on 3683 MNEs from 14 developed countries investing in 66 host countries over the period 2006–2013. Our results suggest that increased re-shoring was triggered by the downturn in the West resulting from the recent global financial crisis. However, our results show that the effect of the global financial crisis on re-shoring is smaller when the distance between parent and subsidiaries becomes larger. In turn, as distance increases, the importance of relative costs declines in explaining re-shoring activity. Finally, MNEs who have engaged in re-shoring in the past are more likely to re-shore again.
Original language | British English |
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Pages (from-to) | 632-643 |
Number of pages | 12 |
Journal | Journal of Business Research |
Volume | 103 |
DOIs | |
State | Published - Oct 2019 |
Keywords
- Foreign direct investment
- Global recession
- Multinational enterprises
- Re-shoring