The reshoring decision under uncertainty in the post-COVID-19 era

Abstract

Purpose Using insights from the supply chain resilience perspective and the international business literature, this study aims to investigate the determinants of firms’ decisions to reshore manufacturing under the high levels of uncertainty brought about by the ongoing US–China trade war and COVID-19 pandemic. Design/methodology/approach The proposed conceptual framework is tested using survey data collected from 702 Taiwanese firms with manufacturing in China. The firms were drawn from a database compiled by Taiwan’s Ministry of Economic Affairs. Findings The results show that two supply chain factors (tariffs and supply chain completeness) and two non-location-bound factors (labor cost and material cost) are critical determinants of the decision to reshore under uncertainty. Originality/value This research elucidates and empirically validates several factors that influence the reshoring decision in uncertain environments. The findings provide valuable theoretical, practical and strategic insights into how firms should manage their value chains in the post-COVID-19 era.