Is COVID-19 a turning point in stopping global sourcing? Differentiating between declining continental and increasing transcontinental sourcing

Abstract

Purpose This research aims to investigate the impact of the current COVID-19 pandemic (C19, Corona) on trends of transcontinental sourcing as an extreme form of global sourcing. This study starts by observing that the sideward movement of international trade in the past decade can be differentiated into an increase in transcontinental sourcing and a relative decline of intra-EU sourcing. By differentiating between continental and transcontinental sourcing, this study gains insights into global sourcing trends and conducts a fine-grained analysis of the impact of COVID-19. Design/methodology/approach After analysing Eurostat statistics, the authors conducted 21 semi-structured interviews with companies from multiple industry sectors affected by a high share of transcontinental suppliers. Using the Gioia method, data from the interviews were structured. By examining the identified motives, challenges and solutions, the authors analyse the impact of COVID-19 on transcontinental sourcing. Findings The COVID-19 pandemic seems not to represent a turning point stopping global sourcing. The authors did not find evidence for a trend reversal. Most of the interviewed companies share the opinion that transcontinental sourcing will remain important or slightly increase in the future. Based on the analysis of their specific motives for transcontinental sourcing, it became clear that factors supportive as well as detrimental to transcontinental sourcing are levelling each other out. Originality/value To the best of the authors’ knowledge, this is the first study explicitly differentiating between continental and transcontinental sourcing as different types of global sourcing. While in European sourcing, a decreasing trend is already evident, as shown by our data analysis, there is a lack of investigations addressing transcontinental sourcing. In this study, the authors concentrated on motives, challenges and solutions of transcontinental sourcing. Extending beyond the immediate COVID-19 impact assessment, findings suggest that purchasing would benefit from treating transcontinental, remote sourcing as a distinct process from continental sourcing, particularly intra-EU-sourcing.