What Happens After Offshoring? A Comprehensive Framework

Abstract

Manufacturing offshoring has received substantial attention within international business studies that have explored where activities are located and how they are governed. However, recent examples of manufacturing relocation to the home country/region have put the advantages of offshoring under scrutiny, since the location of production activities in high-cost countries may have positive impacts in terms of innovation and marketing opportunities. Despite the growing interest in offshoring and “relocations of second degree,” there is a lack of knowledge on the alternative strategies firms may implement after offshoring. This chapter aims to propose a comprehensive framework to summarize and classify the multiple alternatives firms may implement after the initial relocation abroad of manufacturing activities. Based on an extensive literature review and a comparative analysis of Italian case studies, the chapter suggests theoretical advancement in the theory of location of business activities, offering multiple post-offshoring strategic options that may be implemented individually or in combination. In so doing, the analysis also stresses the variety of strategic paths and the complexity of choices concerning manufacturing location, emphasizing reshoring as a nuanced phenomenon and exploring how domestic and foreign locations can complement each other and be mutually reinforcing.