Reshoring or Offshoring: How Global Production Is Changing in Global Value Chains

DOI: 10.20542/0131-2227-2023-67-10-71-81
Yu. Simachev,
National Research University Higher School of Economics, 20, Myasnitskaya Str., Moscow, 101000, Russian Federation.
A. Fedyunina,
National Research University Higher School of Economics, 20, Myasnitskaya Str., Moscow, 101000, Russian Federation.
M. Yurevich,
Financial University under the Government of the Russian Federation, 49/2, Leningradsky Prosp., Moscow, 125167, Russian Federation.

Received 29.05.2023. Revised 19.06.2023. Accepted 10.07.2023.

Acknowledgements. The research was funded by the Russian Science Foundation, Project no. 22-78-10110, “Russian companies in global value chains before and after the COVID‑19 pandemic: the effects of innovation and transformation of business models”.

Abstract. In recent years, a debate on the relationship between reshoring, nearshoring, and offshore outsourcing of operational processes in multinational companies (MNCs) has emerged. However, the evidence provided is often fragmented and rarely considers more than one domestic economy of an MNC. The aim of this article is to discuss the prevalence of reshoring and offshoring in the global economy and the influence of government policies on these processes. Through the analysis of territorial mobility of subsidiaries of major MNCs using the ADIMA OECD database, it was revealed that MNCs restructure their foreign subsidiary networks differently. From the research results, we also see that European MNCs were more likely to be characterized by business compression (40%), while 48% of Asian MNCs saw global expansion and a further 13% were actively involved in offshoring operational phases of their operations. Particularly notable is the relocation of MNC subsidiaries to Europe, resulting from both reshoring initiatives by European companies and the expansion of subsidiary networks by Asian MNCs. We demonstrate that reshoring stimulation policies are only beginning to emerge; however, they likely have existed for some time, intertwined with policies aimed at stimulating and localizing domestic production. We discuss the challenges and opportunities that arise for developing (catching-up) countries in the context of growing territorial mobility of MNC subsidiaries and highlight the feasibility of shifting government policies towards managing the country’s integration into global value chains (GVCs), including the establishment of GVC elements within the national economy.

Keywords: MNCs, backshoring, nearshoring, reshoring, deglobalization


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For citation:
Simachev Y., Fedyunina A., Yurevich M. Reshoring or Offshoring: How Global Production Is Changing in Global Value Chains. World Eonomy and International Relations, 2023, vol. 67, no. 10, pp. 71-81. EDN: PYTFRA

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