Extending the offshoring literature to explain backshoring: An application to the Spanish footwear industry

Abstract

Backshoring as a way of undoing the offshoring strategy has become quite common in many industries and countries. This paper analyses the reasons that may justify this strategy based on International Economics and Transaction Cost Economics. Specifically, we point that the framework to analyse offshoring can be valid, but that the knowledge, experience, etc. of the country that once hosted those activities reduce the costs in the second degree relocation. We present the results of a survey administered to firms in the Spanish footwear industry to evaluate such proposals. The results reveal that backshoring can be explained in the same theoretical framework as the offshoring decision and therefore this strategy simply constitutes a response to the characteristics of the environment of these firms since their offshoring strategy differed in terms of the destination country, business model, etc.