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When does the manufacturing reshoring strategy create value?

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journal contribution
posted on 2022-08-12, 10:01 authored by Antonios Karatzas, Alessandro Ancarani, Luciano Fratocchi, Cristina Di Stefano, Jan GodsellJan Godsell
Reshoring has gained a lot of attention recently by academics and practitioners alike, and is promising to become even more relevant in the aftermath of the COVID-19 pandemic. Building on earlier research on the effects of reshoring announcements on the short-term market value of the firm, this work employs an event-study methodology and aims to understand under which circumstances the market perceives reshoring as potentially more (or less) value-creating. The analysis of a sample of 64 reshoring instances from 2005 to 2019, announced by 54 firms from eight developed economies, suggests that investors are more confident in the firm's future cash-flow potential when: a) it invests in productive activities at home, instead of overseas, i.e. ‘kept-from-offshoring’ (as opposed to actual relocations of activities, i.e. ‘back-reshoring’); b) the reshoring instance is communicated as a ‘plan’ (rather than a fixed ‘decision’); c) no state- or government-induced financial incentives are involved; d) the motivations are primarily ‘cost-efficiency seeking’ (rather than ‘customer perceived value seeking’).

Funding

University of Catania PIA. CE.RI. 2020–2022 Linea 2 - Progetto interdipartimentale GOSPEL

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of Purchasing and Supply Management

Volume

28

Issue

3

Publisher

Elsevier

Version

  • AM (Accepted Manuscript)

Rights holder

© Elsevier

Publisher statement

This paper was accepted for publication in the journal Journal of Purchasing and Supply Management and the definitive published version is available at https://doi.org/10.1016/j.pursup.2022.100771

Acceptance date

2022-04-11

Publication date

2022-04-26

Copyright date

2022

ISSN

1478-4092

Language

  • en

Depositor

Prof Jan Godsell. Deposit date: 9 August 2022

Article number

100771

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