The effect of the industry technology intensity on the drivers of manufacturing backshoring

Abstract

PurposeThe paper aims to explore the influence of the industry technology intensity on the drivers of manufacturing backshoring.Design/methodology/approachAn analysis of backshoring factors in recent cases of backshoring in the European manufacturing industry based on original qualitative and quantitative information collected from different databases. This analysis was performed using different econometric models applied to samples of firms classified by technology intensity of industries.FindingsDrivers of backshoring are conditioned by the technology intensity of the industries. The models that analyse firms classified by technology intensity of the industries have a good explanatory capacity with few key factors. In industries with low-technology intensity, backshoring is a cost-oriented strategy and the drivers are linked to internal process optimisation and external factors related to labour and logistics costs in the host location. In industries with high-technology intensity, backshoring is mainly an innovation-oriented strategy and the key drivers are those related to the internal innovation capacity for improvement of the technological level of manufacturing processes. The research also identifies the more suitable theoretical approaches for explaining backshoring drivers in each type of industry according to its technology intensity.Originality/valueThis research analyses the backshoring drivers by means of models applied to firms classified by the technology intensity of industries. It also reinforces the dynamic perspective of time to analyse backshoring as a reassessment of location decisions made after prior offshoring.