The global recession and the shift to re-shoring:Myth or reality?


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.

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Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing
College of Business and Social Sciences > Aston Business School
Additional Information: © 2017, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
Uncontrolled Keywords: Foreign direct investment,Global recession,Multinational enterprises,Re-shoring,Marketing
Publication ISSN: 1873-7978
Last Modified: 08 Jan 2024 08:32
Date Deposited: 13 Oct 2017 11:55
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Related URLs: https://www.sci ... 3727?via%3Dihub (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2019-10-01
Published Online Date: 2017-10-10
Accepted Date: 2017-09-29
Authors: Delis, Agelos (ORCID Profile 0000-0003-2923-6386)
Driffield, Nigel
Temouri, Yama (ORCID Profile 0000-0003-3014-258X)

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