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Bringing it all back home? Backshoring of manufacturing activities and the adoption of Industry 4.0 technologies

: Dachs, Bernhard; Kinkel, Steffen; Jäger, Angela


Journal of world business 54 (2019), No.6, Art. 101017
ISSN: 1090-9516
Journal Article
Fraunhofer ISI ()
backshoring; Offshoring; industry 4.0; technology

We investigate the relationship between backshoring of production activities and digital manufacturing technologies, also known as Industry 4.0 (I4.0). We argue that I4.0 supports backshoring because it provides a higher productivity and flexibility which offers an incentive for firms to locate production close to their European customers. The empirical test is based on a large dataset of 1700 manufacturing firms from Austria, Germany, and Switzerland. Backshoring is still a rare event with a share of around 4% of all firms. Descriptive statistics as well as regression results indicate a positive correlation between the adoption of I4.0 technologies and companies’ backshoring propensity.