Analysis of Reshoring: Definitions, Causes, Data and Policies

Abstract

The financial crisis of 2008 and, especially, the Covid-19 pandemic have cast a light on the weak spots of the current models of global production. Some of the firms that previously offshored, trying to take advantage of the factors that developing economies offered, started to rethink the location of their production plants. Giants, like Google, General Electrics, Ford and Apple, decided to relocate some of their production capacity back to the USA or to expand their capacity on home soil (The Economist, 2013). The clear advantages of offshoring seemed at least to diminish in the last decades for various reasons. It is also important to take into consideration the fact that the global context has changed after the outbreak of Covid-19. The causes behind reshoring strategies could have changed after this last disruption and the debate whether the risks now outweigh the advantages of offshoring has intensified (OECD, 2021). However, it has to be taken into account that this kind of phenomenon is very recent, so, consequently, the number of sources of data may not be extensive, just like the literature available (Piatanesi and Arauzo-Carod, 2019). Moreover, it may be too early to determine whether Covid-19 has had an effect on reshoring strategies.