A multidisciplinary study of manufacturing reshoring: regional empirical evidences in Veneto, California and the Midlands

Pegoraro, Diletta ORCID: 0000-0002-4931-4823 (2021). A multidisciplinary study of manufacturing reshoring: regional empirical evidences in Veneto, California and the Midlands. University of Birmingham. Ph.D.

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In the last decade, many events occurred that shaped the modus operandi of western firms. Since the backlashes of the Global Financial Crisis (GFC) the western economies have experienced the rise of populism and nationalist governments (e.g. 2016 U.S. Presidential Election and Brexit Referendum) and, at the same time, a restructuration of the Global Value Chains (GVCs) towards a more macro regional perspective (i.e. Europe, East-Asia, North America). Further, the recent diplomatic disputes between United States and China have reshuffled the international operations of firms with an unprecedented uncertainty. Lastly, the recent pandemic crisis highlighted the crucial role of supply chain and how their smoothness operation are essential to face emergency situation, leaving room for a possible radical restructuration of them in the near future towards a more domestic focus (UNCTAD, 2020). As a consequence of these events and the increasing importance of technology for collecting and analysing data, firms are often questioning the location decisions of their daily operations. One option for firms’ location decisions is to reorient their investments into their home country by adopting a manufacturing reshoring strategy.
Manufacturing reshoring strategies have been predominately studied by the discipline of Supply Chain Management, although it is an intrinsic choice of location decision whereby concepts of Economic Geography (EG) and International Business (IB) disciplines come into play. Following on from this important shortcoming of the academic literature, this thesis investigates the manufacturing reshoring strategies by adopting the framework of the Global Value Chains (GVCs) as a bridge between EG and IB. More specifically, the Internalization Theory of IB and the Agglomeration Theory of EG are enacted to explore the operationalization of manufacturing reshoring strategies . To narrow down the boundaries of the unit of analysis, the region as administrative territory is considered (i.e. Veneto in Italy, Midlands in United Kingdom and California in United States). Although part of a Country, each region differs from its Country in terms of knowledge base, industrial system and institutional stakeholders.
In this thesis, manufacturing reshoring is envisaged in three not mutually exclusive strategies : (i) from foreign outsourcing to domestic outsourcing, (ii) from offshoring to onshoring, (iii) from foreign outsourcing to onshoring, and (iv) from offshoring to domestic outsourcing. To test these strategies , a proxy was used which provides three mutually exclusive manufacturing reshoring modalities : (i) Onshoring; (ii) Insourcing; and (iii) Full.
To understand the rationale behind these modalities, a manufacturing reshoring kite is presented whereby factors extrapolated by the relevant literature have been itemized according to their disciplines. The importance of each factor for adopting a manufacturing reshoring strategy is captured through a web-based questionnaire addressed to manufacturing firms established in the regions of Veneto, Midlands and California, in addition to interviews with CEOs and institutional stakeholders. The relevance of each factors has been tested first by an Heckman model, and then with a qualitative analysis.
Results suggest that factors related to efficiency seeking (i.e. investment in automation, digitalization of the production process, partnership with key suppliers, proximity with final market and favourable public policies) are statistically significant for adopting a full reshoring modality. This reveals the indirect importance of a wealthy local supplier system that is able to support the manufacturing reshoring strategy adopted by the firm. Moreover, for adopting a manufacturing reshoring strategy the firm is not the only actor in play as institutional actors should promote a systemic network to facilitate the implementation of the above strategy through ad-hoc university level programs and funding support for a holistic and sustainable long-term regional development.
To conclude, for adopting a successful manufacturing reshoring strategy, a firm cannot operate alone but needs a local system of actors ready to support its operations.

Type of Work: Thesis (Doctorates > Ph.D.)
Award Type: Doctorates > Ph.D.
Chidlow, AgnieszkaUNSPECIFIEDorcid.org/0000-0002-0855-6332
Licence: All rights reserved
College/Faculty: Colleges (2008 onwards) > College of Social Sciences
School or Department: Birmingham Business School, Department of Management
Funders: Other
Other Funders: Birmingham Business School, MAKERS - Smart Manufacturing for EU growth and prosperity is a project funded by the Horizon 2020- MSCA- RISE - Grant agreement number 691192.
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
URI: http://etheses.bham.ac.uk/id/eprint/11884


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