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

Reshoring has attracted particular attention in the media recently, however, there is lack of  detailed understanding of drivers of reshoring. The study offers the first large-scale analysis of the factors that influence reshoring decisions, using 3683 MNEs from 14 developed countries in the period of 2006-2013. The results suggest that increased re-shoring was triggered by the downturn in the West resulting from the recent global financial crisis. The authors also find that the effect of the global financial crisis on re-shoring is smaller when the distance between parent and subsidiaries becomes larger. 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.