Paper info

Homecoming -Exploring the Process of Reshoring from an Industrial Networks Perspective

Barladi E., Ciabuschi F., Lindahl O. and Fratocchi L.

The paper was published at the 32nd IMP-conference in Poznan, Poland in 2016.

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This paper looks at the phenomenon of reshoring, defined as the voluntary process of repatriating manufacturing activities previously off-shored in a foreign country (Fratocchi et al. 2015). Specifically, we analyze the reshoring process not only from a host-market perspective, but also from a home-market one. Research on reshoring has been mainly focused on the reasons why firms choose to reshore activities that previously were offshored and concerns typically the host-country context. These discussions have often revolved around economic rationales and typically relied on international trade theory, strategic management theories (e.g., RBV and TCT), and international business frameworks (e.g., eclectic paradigm and internalization theory). However, based on the assumption that reshoring, similar to business activities in general, seldom occurs in isolation, but that the activities concerned are sometimes closely connected to business networks comprising important suppliers and customers, we argue for the need to better understand how reshoring affects the home-country organization and its local business relationships. Thus, the purpose of this paper is to study the dynamics of the reshoring process from the home country perspective. Specifically, this study is concerned with (1) how reshoring is a process that involve interrelated decisions and changes both at the host and home country levels, as well as (1) how firms’ host and home countries’ organization and networks are affected by reshoring processes. On the basis of the received literature as well as on the findings from a case study exploring the impact of reshoring on the home-country organization and its business relationships, we discuss how “selective” reshoring could be a valuable strategy particularly for SMEs, and how the reshoring process is potentially affected by the firm business strategy, its current pool of competences, and by the adaptability of the host- and home- country networks. This study, which extend the analysis of the reshoring phenomenon to the home country context, contributes to expand our understanding of the reshoring process from a network perspective. The study also helps to further frame the internationalization of firms as a non-linear process (comprehensive of offshoring as well as reshoring processes) and, at a micro level, it introduces the concept of “selective” reshoring as a complement of fine-slicing selective offshoring as part of firms effort to improve performance through reconfiguration and reallocation of resources between markets. The next section provides a theoretical background to frame the study from an IMP perspective. After we will describe the Fitwell case, an Italian producer of mountain shoes that after earlier offshoring activities decided to reshore home part of its operations. A discussion will follow with the purpose of discussing some key evidence that can advance the conceptualization of the reshoring process. The conclusions will highlight our contributions.