IDEAS home Printed from https://ideas.repec.org/a/prg/jnlcbr/v2019y2019i3id217p35-53.html
   My bibliography  Save this article

European Nearshoring Index - Is Eastern Europe Attractive for Swiss IT Firms?

Author

Listed:
  • Florian Keller
  • Benedikt Zoller-Rydzek

Abstract

The main goal of this paper is to identify the major factors for the decision of Swiss IT service firms to nearshore their locations and to quantify their relative importance. Moreover, we develop an IT Nearshoring Index ranking the attractiveness of different European regions. We use a quantitative survey of 56 Swiss IT service firms that are either actively engaging in nearshoring or planning to nearshore parts of their business. Using the survey, we identified five main factors for the nearshoring location decision of Swiss IT firms: economic, labour, institutional, social and location. We pin down the relative importance (weights) of the aforementioned factors using the survey results and expert interviews. The labour factors (including labour costs on the one and the availability of skilled IT workforce on the other side) proved to be most important. We use the obtained weights to construct a (weighted) IT Nearshoring Index. Based on the IT Nearshoring Index, we find that in contrast to general belief, the most attractive locations cannot be found in Eastern Europe, but in Southern UK or Western Germany. The first is due to their high availability of IT workforce, the latter due to their cultural and geographical proximity. Eastern European regions can base their competitive advantage on offering attractive labour costs, but this cannot make up for the disadvantage of greater cultural and geographical distance to Switzerland.

Suggested Citation

  • Florian Keller & Benedikt Zoller-Rydzek, 2019. "European Nearshoring Index - Is Eastern Europe Attractive for Swiss IT Firms?," Central European Business Review, Prague University of Economics and Business, vol. 2019(3), pages 35-53.
    • Handle: RePEc:prg:jnlcbr:v:2019:y:2019:i:3:id:217:p:35-53
    DOI: 10.18267/j.cebr.217
    as

    Download full text from publisher

    File URL: http://cebr.vse.cz/doi/10.18267/j.cebr.217.html
    Download Restriction: free of charge
    File URL: http://cebr.vse.cz/doi/10.18267/j.cebr.217.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.18267/j.cebr.217?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Melitz, Jacques & Toubal, Farid, 2014. "Native language, spoken language, translation and trade," Journal of International Economics, Elsevier, vol. 93(2), pages 351-363.
    2. James R. Markusen, 2021. "Contracts, intellectual property rights, and multinational investment in developing countries," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 8, pages 159-174, World Scientific Publishing Co. Pte. Ltd..
    3. Nicholas Charron & Lewis Dijkstra & Victor Lapuente, 2015. "Mapping the Regional Divide in Europe: A Measure for Assessing Quality of Government in 206 European Regions," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 122(2), pages 315-346, June.
    4. Jordan I. Siegel & Amir N. Licht & Shalom H. Schwartz, 2013. "Egalitarianism, Cultural Distance, and Foreign Direct Investment: A New Approach," Organization Science, INFORMS, vol. 24(4), pages 1174-1194, August.
    5. Argote, Linda & Ingram, Paul, 2000. "Knowledge Transfer: A Basis for Competitive Advantage in Firms," Organizational Behavior and Human Decision Processes, Elsevier, vol. 82(1), pages 150-169, May.
    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. 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.

    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. Dinithi N. Jayasekara & Jonathan H. W. Tan, 2024. "How do intercultural proximity and social fragmentation promote international patent cooperation?," Small Business Economics, Springer, vol. 63(1), pages 421-445, June.
    2. Jonathan Muringani & Rune Dahl Fitjar & Andrés Rodríguez-Pose, 2024. "Political trust and economic development in European regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(4), pages 2059-2089, December.
    3. Magnus Lodefalk & Fredrik Sjöholm & Aili Tang, 2022. "International trade and labour market integration of immigrants," The World Economy, Wiley Blackwell, vol. 45(6), pages 1650-1689, June.
    4. Boeker, Warren & Howard, Michael D. & Basu, Sandip & Sahaym, Arvin, 2021. "Interpersonal relationships, digital technologies, and innovation in entrepreneurial ventures," Journal of Business Research, Elsevier, vol. 125(C), pages 495-507.
    5. Sseruyange, J. & Bulte, E., 2018. "Do Incentives matter for Knowledge Diffusion? Experimental Evidence from Uganda," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275896, International Association of Agricultural Economists.
    6. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    7. Lin, Wenlian & Cao, Jerry & Zhou, Sili & Li, Yong, 2024. "Political affinity, multilateralism, and foreign direct investment worldwide," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 94(C).
    8. Lo Turco, Alessia & Maggioni, Daniela, 2018. "Effects of Islamic religiosity on bilateral trust in trade: The case of Turkish exports," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 947-965.
    9. Shahid Qureshi & Sarfraz Mian, 2021. "Transfer of entrepreneurship education best practices from business schools to engineering and technology institutions: evidence from Pakistan," The Journal of Technology Transfer, Springer, vol. 46(2), pages 366-392, April.
    10. Tamara Gurevich & Peter R. Herman & Farid Toubal & Y. Yotov, 2024. "The Domestic and International Common Language Database," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04682625, HAL.
    11. Elif Bascavusoglu & Maria Pluvia Zuniga, 2005. "The effects of intellectual property protection on international knowledge contracting," Cahiers de la Maison des Sciences Economiques bla05009, Université Panthéon-Sorbonne (Paris 1).
    12. Victor Ginsburgh & Shlomo Weber, 2020. "The Economics of Language," Journal of Economic Literature, American Economic Association, vol. 58(2), pages 348-404, June.
    13. Eric W. Bond & Kamal Saggi, 2023. "Compulsory licensing, price controls, and access to patented foreign products," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 19, pages 437-448, World Scientific Publishing Co. Pte. Ltd..
    14. Alfano, Vincenzo, 2024. "Unlocking the importance of perceived governance: The impact on COVID-19 in NUTS-2 European regions," Social Science & Medicine, Elsevier, vol. 343(C).
    15. Alice Medioli & Pier Luigi Marchini & Tatiana Mazza, 2024. "The impact of corruption and public governance quality on family firm business strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 33(1), pages 55-69, January.
    16. Alireza Naghavi & Yingyi Tsai, 2015. "Cross-Border Intellectual Property Rights: Contract Enforcement and Absorptive Capacity," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(2), pages 211-226, May.
    17. Haradhan Kumar MOHAJAN, 2019. "Knowledge Sharing among Employees in Organizations," Journal of Economic Development, Environment and People, Alliance of Central-Eastern European Universities, vol. 8(1), pages 52-61, March.
    18. Caligiuri, Paula & Bonache, Jaime, 2016. "Evolving and enduring challenges in global mobility," Journal of World Business, Elsevier, vol. 51(1), pages 127-141.
    19. Andrés Rodríguez-Pose & Roberto Ganau, 2022. "Institutions and the productivity challenge for European regions," Journal of Economic Geography, Oxford University Press, vol. 22(1), pages 1-25.
    20. Roberto Cellini & Tiziana Cuccia & Livio Ferrante & Domenico Lisi, 2024. "The Quality of Regional Institutional Context and Museum Service Provision: Evidence from Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(1), pages 155-195, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

    Statistics

    Access and download statistics

    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:prg:jnlcbr:v:2019:y:2019:i:3:id:217:p:35-53. 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: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.html .

    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.