Should I stay (abroad, but in another country) or should I go (back home)? A study on the intra-EU relocations of second degree in the manufacturing industries

Using data from the European Restructuring Monitor, this paper explores the relocation of second degree (RoSD) of European manufacturing companies in the time span between 2002 and 2015. Within RoSDs we distinguish two typologies: “Relocation to the Home Country (RHC)” and “Relocation to a Third Country (RTC)”. In this paper we provide a descriptive analysis of the trends over time and a network analysis of the origin and destination countries, with a special attention to the distinction between Western and Eastern Europe and to the role of the financial crisis. Moreover, we explore the role of the location drivers underlying the initial cross-border investment in fostering the two different type of RoSDs. Results show that the firms that invest abroad for market-seeking and asset-seeking reasons are more likely to undertake a RHC, while firms investing abroad for cost-saving and productivity reasons are more likely to relocate to third country.