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Prior to reshoring: A duration analysis of foreign manufacturing ventures

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  • Ancarani, Alessandro
  • Di Mauro, Carmela
  • Fratocchi, Luciano
  • Orzes, Guido
  • Sartor, Marco

Abstract

This paper throws light on the determinants of the duration of manufacturing offshore experiences by US and European firms prior to reshoring. By applying survival analysis to a dataset of 249 offshoring experiences terminated with a relocation to the home country/region, we estimate the effects of different groups of survival determinants. Results highlight that contextual factors such as the industry, the home country, the host country, and the size of the firm significantly affect the duration of offshoring experiences. The likelihood of termination is in fact higher for the electronics and automotive industries, for small firms, for firms headquartered in Europe, and for offshoring to Asia. The analysis of the motivations for reshoring shows that quality issues experienced offshore emerge as the key factor giving rise to shorter offshore stays. Based on these empirical findings, a set of testable propositions is developed. In particular, we conjecture that the likelihood of termination of offshore manufacturing and the return to the home country may be accelerated by technology-based industries, small firm sizes, shrinking cost differentials and the psychic distance between home and host country, the organizational archetypes, and quality related motivations.

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  • 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.
  • Handle: RePEc:eee:proeco:v:169:y:2015:i:c:p:141-155
    DOI: 10.1016/j.ijpe.2015.07.031
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    Cited by:

    1. Jan Stentoft & Ole Stegman Mikkelsen & Jesper Kronborg Jensen, 2016. "Flexicurity and relocation of manufacturing," Operations Management Research, Springer, vol. 9(3), pages 133-144, December.
    2. repec:bla:revinw:v:64:y:2018:i:1:p:26-51 is not listed on IDEAS
    3. 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.
    4. repec:gam:jsusta:v:10:y:2018:i:7:p:2384-:d:156996 is not listed on IDEAS
    5. 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.
    6. Jan Stentoft & Jan Olhager & Jussi Heikkilä & Lisa Thoms, 2016. "Manufacturing backshoring: a systematic literature review," Operations Management Research, Springer, vol. 9(3), pages 53-61, December.
    7. Ioannis Bournakis & Michela Vecchi & Francesco Venturini, 2018. "Off‐Shoring, Specialization and R&D," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(1), pages 26-51, March.
    8. repec:spr:opmare:v:10:y:2017:i:3:d:10.1007_s12063-017-0124-5 is not listed on IDEAS
    9. repec:eee:worbus:v:53:y:2018:i:2:p:194-208 is not listed on IDEAS
    10. repec:eee:proeco:v:199:y:2018:i:c:p:199-208 is not listed on IDEAS

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