Offshoring vs Reshoring: the impact of the global pandemic on Italian international commerce.

The COVID-19 pandemic marked a dramatic turning point in history, rapidly turning from a health emergency into a deep socio-economic recession. Restrictions placed by governments all over the world to prevent the spreading of the virus caused the shut down of many commercial activities and institutions, with devastating consequences on employment and people’s wellbeing, affecting all, albeit diverse, economic sectors. The epidemic is also one of the various factors that pushed nations to confront the hidden fragilities brought on by globalization, among which interdependencies. Indeed, since the last half of the 20th century the increasing trend of firms relocating steps of their supply chain abroad has ensured the birth of what literature refers to as Global Value Chains, which contributed to the amplification of the pandemics’ shocks. Before the virus hit, the need for a simplification for this intricated network was already being discussed, along with the rising concerns about the possibility of a deglobalization process being pushed by the increasing reshoring activity and the lowering delocalization enthusiasm. Reshoring, the return to the country of origin of the activities and processes previously located abroad, is, in fact, the exact countertrend to offshoring, one of the many internationalizations approaches a company could choose to follow. The aim of this work is to analyze characteristics and drivers of the two different strategies, and, while studying the effects the epidemic had on the Italian economy, particularly on its imports and exports activities, determining whether it was a crucial factor that pushed the trends of either approach for Italian firms. To do so, chapter 1 proposes a brief introduction to global trade to then describe the offshoring phenomenon, its drivers and effects and its global market size. Chapter 2 analyses the different types of reshoring strategies and the reasons behind them, while also giving clarity on the deglobalization debate. Lastly, chapter 3 studies the Italian production system its peculiarities and its evolution throughout history, Italy’s placement in the European Union and at last, core to this thesis work, the effects the pandemic had on the country’s international commerce and the analysis of the influence it had on Italian firms’ offshoring and reshoring decisions.