IDEAS home Printed from https://ideas.repec.org/a/spr/opmare/v14y2021i1d10.1007_s12063-020-00173-w.html
   My bibliography  Save this article

Back-shoring vs near-shoring: a comparative exploratory study in the footwear industry

Author

Listed:
  • Fernando Merino

    (University of Murcia)

  • Cristina Di Stefano

    (University of L’Aquila)

  • Luciano Fratocchi

    (University of L’Aquila)

Abstract

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 requested in the extant literature, a contingency approach is adopted, focusing attention on the footwear industry. Given the exploratory nature of the paper, evidence from 41 back-shoring and near-shoring strategies are analysed, comparing data from Spanish and Italian companies. Collected data are adapted to test hypotheses concerning three sets of variables: firms’ characteristics, motivations for the second degree relocation and its barriers. Collected data show that firm’s size directly influences the chosen alternative since larger companies prefer to near-shore instead of back-shore. When considering motivations, while the “made in” effect does not influence the firm’s choice, availability of skilled contractors and/or government aids induces companies to relocate to the home country instead of the home region. Finally, companies fearing encountering barriers, in terms of skilled contractors’ availability and/or (re-)development of internal manufacturing competences, will prefer the back-shoring rather than the near-shoring option. The study is focused on two countries (Spain and Italy) where the manufacturing sector (and the footwear industry within it) is still relevant to the local economy. Findings cannot be generalized to countries/industries where the local industry has been totally dismantled, without a previous in-depth analysis. The findings obtained offer managers useful insights on the elements that should be carefully evaluated when considering back- and near-shore alternatives. Additionally, valuable insights are provided for policy makers that plan to design industrial policies supporting back-reshoring policy initiatives. To the best of our knowledge, this is the first paper in the extant literature addressing variables influencing the choice between back- and near-shoring alternatives.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:opmare:v:14:y:2021:i:1:d:10.1007_s12063-020-00173-w
    DOI: 10.1007/s12063-020-00173-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12063-020-00173-w
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12063-020-00173-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jagjit Singh Srai & Camille Ané, 2016. "Institutional and strategic operations perspectives on manufacturing reshoring," International Journal of Production Research, Taylor & Francis Journals, vol. 54(23), pages 7193-7211, December.
    2. Benedetta Piatanesi & Josep‐Maria Arauzo‐Carod, 2019. "Backshoring and nearshoring: An overview," Growth and Change, Wiley Blackwell, vol. 50(3), pages 806-823, September.
    3. Baldwin, Richard & Venables, Anthony J., 2013. "Spiders and snakes: Offshoring and agglomeration in the global economy," Journal of International Economics, Elsevier, vol. 90(2), pages 245-254.
    4. Hiroshi Kurata & Ryoichi Nomura & Nobuhito Suga, 2020. "Vertical specialization in North–South trade: Industrial relocation, wage and welfare," Review of International Economics, Wiley Blackwell, vol. 28(1), pages 119-137, February.
    5. Florentina Constantin & Giovanna Giusti & Giuseppe Tattara, 2010. "Strategies of Italian Firms in Romania: Evidence from Selected Case Studies," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(4), pages 829-847, February.
    6. Wu, Peng & Jin, Ying & Shi, Yongjiang & Shyu, Hawfeng, 2017. "The impact of carbon emission costs on manufacturers' production and location decision," International Journal of Production Economics, Elsevier, vol. 193(C), pages 193-206.
    7. Antonella Moretto & Andrea Stefano Patrucco & Christine Mary Harland, 2020. "The dynamics of reshoring decisions and the role of purchasing," International Journal of Production Research, Taylor & Francis Journals, vol. 58(19), pages 5929-5944, October.
    8. Fox, Stephen, 2015. "Moveable factories: How to enable sustainable widespread manufacturing by local people in regions without manufacturing skills and infrastructure," Technology in Society, Elsevier, vol. 42(C), pages 49-60.
    9. Dalia Marin, 2018. "Global Value Chains, the Rise of the Robots and Human Capital," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 98(1), pages 46-49, April.
    10. Ancarani, Alessandro & Di Mauro, Carmela & Fratocchi, Luciano & Orzes, Guido & Sartor, Marco, 2015. "Prior to reshoring: A duration analysis of foreign manufacturing ventures," International Journal of Production Economics, Elsevier, vol. 169(C), pages 141-155.
    11. Weifeng Zhai & Shiling Sun & Guangxing Zhang, 2016. "Reshoring of American manufacturing companies from China," Operations Management Research, Springer, vol. 9(3), pages 62-74, December.
    12. 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.
    13. 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.
    14. Roger Strange, 2020. "The 2020 Covid-19 pandemic and global value chains," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(3), pages 455-465, September.
    15. Morris A. Cohen & Shiliang Cui & Ricardo Ernst & Arnd Huchzermeier & Panos Kouvelis & Hau L. Lee & Hirofumi Matsuo & Marc Steuber & Andy A. Tsay, 2018. "OM Forum—Benchmarking Global Production Sourcing Decisions: Where and Why Firms Offshore and Reshore," Manufacturing & Service Operations Management, INFORMS, vol. 20(3), pages 389-402, July.
    16. Gary Gereffi, 2020. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 287-301, September.
    17. Seung Hwan Jung, 2020. "Offshore versus Onshore Sourcing: Quick Response, Random Yield, and Competition," Production and Operations Management, Production and Operations Management Society, vol. 29(3), pages 750-766, March.
    18. Alison Ashby, 2016. "From global to local: reshoring for sustainability," Operations Management Research, Springer, vol. 9(3), pages 75-88, December.
    19. Oshri, Ilan & Sidhu, Jatinder S. & Kotlarsky, Julia, 2019. "East, west, would home really be best? On dissatisfaction with offshore-outsourcing and firms' inclination to backsource," Journal of Business Research, Elsevier, vol. 103(C), pages 644-653.
    20. Alexandre Lavissiere & Tibor Mandják & Laurent Fedi, 2016. "The key role of infrastructure in backshoring operations: the case of free zones," Post-Print hal-01954495, HAL.
    21. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    22. Giuseppina Talamo & Michele Sabatino, 2018. "Reshoring in Italy: a recent analysis," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 12(4), December.
    23. Shaheen Sardar & Young Hae Lee, 2015. "Analysis of Product Complexity considering Disruption Cost in Fast Fashion Supply Chain," Mathematical Problems in Engineering, Hindawi, vol. 2015, pages 1-15, July.
    24. 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.
    25. Zhao, Lima & Huchzermeier, Arnd, 2017. "Integrated operational and financial hedging with capacity reshoring," European Journal of Operational Research, Elsevier, vol. 260(2), pages 557-570.
    26. Sharif Rasel & Ismail Abdulhak & Paul Kalfadellis & Mariano L. M. Heyden, 2020. "Coming home and (not) moving in? Examining reshoring firms’ subnational location choices in the United States," Regional Studies, Taylor & Francis Journals, vol. 54(5), pages 704-718, May.
    27. Lydia Bals & Jon F. Kirchoff & Kai Foerstl, 2016. "Exploring the reshoring and insourcing decision making process: toward an agenda for future research," Operations Management Research, Springer, vol. 9(3), pages 102-116, December.
    28. Gylling, Michael & Heikkilä, Jussi & Jussila, Kari & Saarinen, Markku, 2015. "Making decisions on offshore outsourcing and backshoring: A case study in the bicycle industry," International Journal of Production Economics, Elsevier, vol. 162(C), pages 92-100.
    29. Steffen Kinkel & Gunter Lay & Spomenka Maloca, 2007. "Development, motives and employment effects of manufacturing offshoring of German SMEs," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 4(3), pages 256-276.
    30. David Bailey & Carlo Corradini & Lisa De Propris, 2018. "‘Home-sourcing’ and closer value chains in mature economies: the case of Spanish manufacturing," Cambridge Journal of Economics, Oxford University Press, vol. 42(6), pages 1567-1584.
    31. Shaheen Sardar & Young Hae Lee & Muhammad Saad Memon, 2016. "A Sustainable Outsourcing Strategy Regarding Cost, Capacity Flexibility, and Risk in a Textile Supply Chain," Sustainability, MDPI, vol. 8(3), pages 1-19, March.
    32. Scott, Allen J., 2006. "The Changing Global Geography of Low-Technology, Labor-Intensive Industry: Clothing, Footwear, and Furniture," World Development, Elsevier, vol. 34(9), pages 1517-1536, September.
    33. Verdu, Antonio J. & Gómez-Gras, José María & Martínez-Mateo, Jesús, 2012. "Value creation through production offshore–inshore strategies in a footwear industry cluster: A coevolutionary perspective," International Business Review, Elsevier, vol. 21(3), pages 342-356.
    34. Behrooz Gharleghi & Asghar Afshar Jahanshahi & Tobias Thoene, 2020. "Locational factors and the reindustrialisation process in the USA; reshoring from China," International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 24(2), pages 275-292.
    35. Henrik Brynthe Lund & Markus Steen, 2019. "Make at home or abroad? Manufacturing reshoring through a GPN lens," PEGIS geo-disc-2019_09, Institute for Economic Geography and GIScience, Department of Socioeconomics, Vienna University of Economics and Business.
    36. Li Chen & Bin Hu, 2017. "Is Reshoring Better Than Offshoring? The Effect of Offshore Supply Dependence," Manufacturing & Service Operations Management, INFORMS, vol. 19(2), pages 166-184, May.
    37. Roberto Grandinetti & Raffaella Tabacco, 2015. "A return to spatial proximity: combining global suppliers with local subcontractors," International Journal of Globalisation and Small Business, Inderscience Enterprises Ltd, vol. 7(2), pages 139-161.
    38. Hutzschenreuter, Thomas & Lewin, Arie Y. & Dresel, Stephan, 2011. "Governance modes for offshoring activities: A comparison of US and German firms," International Business Review, Elsevier, vol. 20(3), pages 291-313, June.
    39. Zhai, Weifeng, 2014. "Competing back for foreign direct investment," Economic Modelling, Elsevier, vol. 39(C), pages 146-150.
    40. Stella Lowder, 1999. "Globalisation of the Footwear Industry: A Simple Case of Labour?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 90(1), pages 47-60, February.
    41. Vida Vanchan & Rachel Mulhall & John Bryson, 2018. "Repatriation or Reshoring of Manufacturing to the U.S. and UK: Dynamics and Global Production Networks or from Here to There and Back Again," Growth and Change, Wiley Blackwell, vol. 49(1), pages 97-121, March.
    42. 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.
    43. Hartman, Paul L. & Ogden, Jeffrey A. & Wirthlin, Joseph R. & Hazen, Benjamin T., 2017. "Nearshoring, reshoring, and insourcing: Moving beyond the total cost of ownership conversation," Business Horizons, Elsevier, vol. 60(3), pages 363-373.
    44. Mazzola, Erica & Bruccoleri, Manfredi & Perrone, Giovanni, 2019. "The curvilinear effect of manufacturing outsourcing and captive-offshoring on firms' innovation: The role of temporal endurance," International Journal of Production Economics, Elsevier, vol. 211(C), pages 197-210.
    45. 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.
    46. Xiaole Wu & Fuqiang Zhang, 2014. "Home or Overseas? An Analysis of Sourcing Strategies Under Competition," Management Science, INFORMS, vol. 60(5), pages 1223-1240, May.
    47. Cohen, Morris A. & Cui, Shiliang & Ernst, Ricardo & Lee, Hau L. & Huchzermeier, Arnd & Kouvelis, Panos & Matsuo, Hirofumi & Steuber, Marc, 2020. "Benchmarking Global Production Sourcing Decisions: Where and Why Firms Offshore and Reshore," Research Papers 3855, Stanford University, Graduate School of Business.
    48. Grappi, Silvia & Romani, Simona & Bagozzi, Richard P., 2018. "Reshoring from a demand-side perspective: Consumer reshoring sentiment and its market effects," Journal of World Business, Elsevier, vol. 53(2), pages 194-208.
    49. Silvia Grappi & Simona Romani & Richard P. Bagozzi, 2020. "Consumer Reshoring Sentiment and Animosity: Expanding Our Understanding of Market Responses to Reshoring," Management International Review, Springer, vol. 60(1), pages 69-95, February.
    50. Delis, Agelos & Driffield, Nigel & Temouri, Yama, 2019. "The global recession and the shift to re-shoring: Myth or reality?," Journal of Business Research, Elsevier, vol. 103(C), pages 632-643.
    51. 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.
    52. Gary Gereffi, 0. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 0, pages 1-15.
    53. Olli-Pekka Hilmola & Andres Tolli & Yulia Panova, 2019. "Global Corporations And Smaller Actors In Textile Business: European Perspective," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(1), pages 216-230.
    54. Stanislav D. Dobrev & Glenn R. Carroll, 2003. "Size (and competition) among organizations: modeling scale‐based selection among automobile producers in four major countries, 1885–1981," Strategic Management Journal, Wiley Blackwell, vol. 24(6), pages 541-558, June.
    55. Ancarani, Alessandro & Di Mauro, Carmela & Mascali, Francesco, 2019. "Backshoring strategy and the adoption of Industry 4.0: Evidence from Europe," Journal of World Business, Elsevier, vol. 54(4), pages 360-371.
    56. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Andrés Fernández-Miguel & Maria Pia Riccardi & Valerio Veglio & Fernando E. García-Muiña & Alfonso P. Fernández del Hoyo & Davide Settembre-Blundo, 2022. "Disruption in Resource-Intensive Supply Chains: Reshoring and Nearshoring as Strategies to Enable Them to Become More Resilient and Sustainable," Sustainability, MDPI, vol. 14(17), pages 1-13, August.
    3. Luíza Neves Marques Fonseca & Angela Rocha, 2023. "Setbacks, interruptions and turnarounds in the internationalization process: a bibliometric and literature review of de-internationalization," Management Review Quarterly, Springer, vol. 73(3), pages 1351-1384, September.
    4. Achilleas Tsantis & John Mangan & Agustina Calatayud & Roberto Palacin, 2023. "Container shipping: a systematic literature review of themes and factors that influence the establishment of direct connections between countries," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 25(4), pages 667-697, December.

    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. Silvia Cosimato & Roberto Vona, 2021. "Digital Innovation for the Sustainability of Reshoring Strategies: A Literature Review," Sustainability, MDPI, vol. 13(14), pages 1-16, July.
    3. Diletta Pegoraro & Lisa Propris & Agnieszka Chidlow, 2022. "Regional factors enabling manufacturing reshoring strategies: A case study perspective," Journal of International Business Policy, Palgrave Macmillan, vol. 5(1), pages 112-133, March.
    4. Luíza Neves Marques Fonseca & Angela Rocha, 2023. "Setbacks, interruptions and turnarounds in the internationalization process: a bibliometric and literature review of de-internationalization," Management Review Quarterly, Springer, vol. 73(3), pages 1351-1384, September.
    5. 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.
    6. Di Mauro, Carmela & Ancarani, Alessandro, 2022. "A taxonomy of back-shoring initiatives in the US," International Business Review, Elsevier, vol. 31(5).
    7. 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.
    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. 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.
    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. 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.
    12. 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).
    13. 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.
    14. 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.
    15. Li, Xinwei & Tse, Ying Kei & Zhang, Minhao & Phi, Hoang Dinh, 2023. "Impact of relocation strategy on brand trustworthiness and word-of-mouth: Experimental vignette research on the US fashion industry," International Journal of Production Economics, Elsevier, vol. 257(C).
    16. Piatanesi, Benedetta & Arauzo Carod, Josep Maria, 2019. "An Analysis about reverse offshoring," Working Papers 2072/376030, Universitat Rovira i Virgili, Department of Economics.
    17. Johansson, Malin & Olhager, Jan, 2018. "Comparing offshoring and backshoring: The role of manufacturing site location factors and their impact on post-relocation performance," International Journal of Production Economics, Elsevier, vol. 205(C), pages 37-46.
    18. 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.
    19. 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.
    20. Ryan W. Tang & Ying Zhu & Hongbo Cai & Jinrong Han, 2021. "De-internationalization: A Thematic Review and the Directions Forward," Management International Review, Springer, vol. 61(3), pages 267-312, June.

    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:spr:opmare:v:14:y:2021:i:1:d:10.1007_s12063-020-00173-w. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.