The Nearshoring Loop: A Review of Triggers, Location Choice, and Captured Outcomes

Background: Nearshoring has risen after shocks and policy shifts. We synthesize evidence in a compact loop linking triggers (trade frictions, supply-chain risk, new agreements) to location choices mediated by multidimensional proximity (geographic, institutional, organizational, social, cognitive, functional) to components (manufacturing footprint, Foreign Direct Investment (FDI), employment) and outcomes (spillovers, productivity, innovation) conditioned by absorptive capacity and institutions. Methods: We conducted a literature review using major bibliographic databases. A staged screening pipeline (deduplication, pre-eligibility, and title–abstract screening) preceded full-text coding aligned with the review framework (triggers, proximity, components, outcomes, mediators). Studies were appraised with a five-criterion checklist, and themes were consolidated with basic bibliometric checks. Results: Evidence is North Atlantic and manufacturing-centric. Supply-chain disruptions dominate triggers; non-geographic proximity strongly moderates relocation. FDI anchors ecosystems, while employment effects are lagged and compositional. Strong capability and policy mixes yield broader spillovers; otherwise, benefits remain enclave-like. Sustainability and transformative outcomes are rarely assessed. Conclusions: The loop clarifies feedback from outcomes to future siting. Firms should build proximity beyond geography and pair early FDI with supplier and skills upgrading; policymakers should align instruments to governance, capability formation, and logistics. Research should expand Global South coverage and integrate environmental and inclusion metrics.