Nearshoring An Italian case study of manufacturing firms

The thesis explores the phenomenon of nearshoring, examining its drivers, consequences, and evolving trends. At first the paper highlights some important contents obtained in the academic literature about offshoring, reshoring and nearshoring. Offshoring, the relocation of production processes to foreign locations, has been significantly influenced by globalization and reduced trade barriers. Then, Reshoring, the relocation of manufacturing activities back to the home country, has gained prominence in recent years due to several factors, including changes in the competitive environment, strategic repositioning, the correction of previous managerial mistakes and other internal factors. A new phenomenon called Nearshoring, the relocation of manufacturing activities to nearby countries, has gaining importance due to factors such as reduced trade barriers, geopolitical tensions, and supply chain disruptions. The study analyzes the motivations behind nearshoring decisions, including cost savings, improved responsiveness, and intellectual property protection. It also investigates the factors influencing the choice of nearshoring destinations, such as geographic proximity, cultural similarities, and economic conditions. Furthermore, the research examines the types of firms that are more likely to engage in nearshoring, considering factors like size, industry, and prior offshoring experience. The following parts of the thesis focus on a dataset of import and export transactions of 5.000 Italian manufacturing firms from 2008 to 2019 in three different samples, each one through three different approaches. The approaches change according to three definitions of nearshoring: the first one related to nearby countries in geographic terms, the second one related to only European members as nearby countries and the third one related to political closeness screening the nearby countries as members of the OECD organization. The three databases differ for the definition of Offshoring because the study identifies an offshoring firm when it has at least one import and one export transactions with ateco code of the firm equal to the ateco code of transaction (in 4-, 5- and 3-digit respectively) and the nearshoring is measured only considering the occurrences of offshoring companies. The hypothesis is that the companies traded their main good manufactured abroad. The study finds around the 31% of nearshoring companies in respect to all offshoring firms (11% of the original database). Eventually the analysis focuses on the most important ateco codes of nearshoring companies in order to point out that textile, plastic material and dairy industries are more involved in the phenomenon. By exploring these aspects, this research aims to contribute to a deeper understanding of the complex phenomenon of nearshoring and its implications for businesses, economies, and societies worldwide.