This paper adopts risk management arguments in line with the internationalization process of firms to theorize on reshoring as a decision-making process. While reshoring - the activity of bringing back activities from foreign markets - has previously mainly been discussed as a decision based on arguments from the economic tradition, we offer an alternative, behavioral view of what drives this phenomenon. Reshoring is here conceptualized as part of firms’ nonlinear internationalization process and we extend previous work by focusing on firm’s commitment, knowledge and uncertainty as key variables to explain firms’ behavior when considering decisions to reshore. Moreover we elaborate on how a behavioral view not only allows us to understand reshoring as a risk management decision, but also allows us to understand risk in relation to reshoring as relative and perceived rather than objective and absolute. We discuss the relevance of managers’ perception of risk and postulate five propositions concerning the effects of risk contingencies on a firm’s decision to reshore. This paper contributes to international business research by introducing a risk management perspective to the decisions of reshoring based on the internationalization process logic. In so doing, we specifically introduce the concept of likelihood of reshoring, a situation determined by three typologies of risks associated with the reshoring decision: host-country related risk, home-country related risk, and reshoring process specific risk. A model and propositions are presented to discuss how these risks may affect managerial decision-making on reshoring in different ways.

A Behavioral and Risk-Management View of Reshoring

BARBIERI, PAOLO;Ciabuschi, Francesco
2016

Abstract

This paper adopts risk management arguments in line with the internationalization process of firms to theorize on reshoring as a decision-making process. While reshoring - the activity of bringing back activities from foreign markets - has previously mainly been discussed as a decision based on arguments from the economic tradition, we offer an alternative, behavioral view of what drives this phenomenon. Reshoring is here conceptualized as part of firms’ nonlinear internationalization process and we extend previous work by focusing on firm’s commitment, knowledge and uncertainty as key variables to explain firms’ behavior when considering decisions to reshore. Moreover we elaborate on how a behavioral view not only allows us to understand reshoring as a risk management decision, but also allows us to understand risk in relation to reshoring as relative and perceived rather than objective and absolute. We discuss the relevance of managers’ perception of risk and postulate five propositions concerning the effects of risk contingencies on a firm’s decision to reshore. This paper contributes to international business research by introducing a risk management perspective to the decisions of reshoring based on the internationalization process logic. In so doing, we specifically introduce the concept of likelihood of reshoring, a situation determined by three typologies of risks associated with the reshoring decision: host-country related risk, home-country related risk, and reshoring process specific risk. A model and propositions are presented to discuss how these risks may affect managerial decision-making on reshoring in different ways.
PROCEEDINGS OF THE 42ND ANNUAL CONFERENCE OF THE EUROPEAN INTERNATIONAL BUSINESS ACADEMY (EIBA)
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Barbieri, Paolo; Lindahl, Olof; Fratocchi, Luciano; Ciabuschi, Francesco
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11585/598498
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