Assessing the Impact of Reshoring Strategies on Supply Chains

: A Dual Perspective on Signaling and Implementation

Abstract

Recent disruptions, such as trade wars and the COVID-19 pandemic, have exerted
unprecedented pressures on global supply chains, uncovering their vulnerabilities. These events highlighted the complexities and dependencies in the supply chains
developed by multinational corporations for gaining a competitive edge, which were
suddenly faced with unforeseen difficulties. In response, numerous companies have
adopted reshoring as a strategic measure. This strategy entails shortening the supply
chain and fostering partnerships with domestic collaborators to reduce the risk of
disruptions and increase environmental certainty, thereby enhancing the chances of
survival in the event of disruptions. However, prior research has largely concentrated
on the drivers, decision-making processes, and performance of reshoring under
normal conditions, leaving a gap in understanding the performance of companies that
undertake reshoring during global disruptions. Moreover, the impact of reshoring on
additional stakeholders within the supply chain has been minimally investigated. Therefore, this study tries to explore the effects of reshoring strategies during global
disruptions, focusing on both signaling and implementation impacts, including the
effects on domestic suppliers. Specifically, Chapter 2 (study 1) investigates the impact
of reshoring signaling on organizational resilience in the context of the COVID-19
pandemic, finding that such signaling reduces severity of loss and shortens time to
recovery, thereby strengthening resilience. Chapter 3 (study 2) expands the
examination of reshoring signaling from focal companies to domestic suppliers, revealing that reshoring announcements significantly negatively impact the
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shareholder wealth of these suppliers. Chapter 4 (study 3) investigates the
performance of companies that have already implemented reshoring during the
COVID-19 pandemic. The results highlight a trade-off: while reshoring significantly
reduces firm risk by mitigating global supply chain vulnerabilities during disruptions, this risk reduction is achieved at the cost of operational efficiency. Overall, empirical
evidence suggests that reshoring strategies can increase organizational resilience to
global disruptions and reduce firm risk during this period. However, these benefits
come with reduced operational efficiency and adverse effects on domestic supplier
shareholder wealth. This doctoral thesis therefore adds to the reshoring literature by
examining the impact of organizational resilience, strategic risk management and
stakeholder impact, providing theoretical insights into reshoring strategies during
global disruption. Additionally, this research provides managers and policymakers
with practical implications for the broader strategic and operational implications of
reshoring in today's volatile global market environment.

Date of Award	1 Oct 2024
Original language	English
Awarding Institution	University of Bristol
Supervisor	Xiaojun Wang (Supervisor) & Minhao Zhang (Supervisor)