The popular press has begun to pay attention to the phenomenon of reshoring. The task of supply chain management researchers with regard to this phenomenon should be to clarify what it is; to explore whether it is really a new phenomenon; and, paraphrasing (Simon, 1967; p. 1), to conduct research into the reshoring phenomenon so as to contribute not only to the science but also to the practice of reshoring. This essay is a starting point for our efforts in that direction. We make a number of informed assertions about reshoring-assertions that are juxtaposed in relevant literature and that aim to (a) define what reshoring is and is not; (b) explain why the reshoring phenomenon should not be examined in isolation but rather as a reversion of a prior offshoring decision; (c) describe how the reshoring phenomenon might evolve as societies, worldwide, place increasing emphasis on the environmental impact of business decisions; and (d) articulate a plausible scenario in which reshoring eventually hampers employment in Western nations. We hope these assertions will, in turn, jumpstart an intellectual discourse, through scientific research, into the what, how, when, where, and why of the reshoring phenomenon.

Small to medium‐sized enterprises (SMEs) are moving their manufacturing operations from low‐cost countries back to high‐cost countries, reversing earlier offshoring decisions. These reshoring decisions cannot be completely explained by changing location‐related costs. To better understand why SMEs are reshoring, we evaluate nine product‐line decisions – six to reshore and three to remain offshore – and codify four empirical observations. We then integrate these observations with relevant literature to develop and analyze a system dynamics model of SMEs' offshoring and reshoring decisions. Synthesizing the above, we articulate propositions regarding SMEs’ reshoring decisions. We conclude by discussing these decisions through the lens of the heuristic decision‐making literature, providing managerial and policy implications.

The popular press has begun to pay attention to the phenomenon of reshoring. The task of supply chain management researchers with regard to this phenomenon should be to clarify what it is; to explore whether it is really a new phenomenon; and, paraphrasing (Simon, 1967; p. 1), to conduct research into the reshoring phenomenon so as to contribute not only to the science but also to the practice of reshoring. This essay is a starting point for our efforts in that direction. We make a number of informed assertions about reshoring-assertions that are juxtaposed in relevant literature and that aim to (a) define what reshoring is and is not; (b) explain why the reshoring phenomenon should not be examined in isolation but rather as a reversion of a prior offshoring decision; (c) describe how the reshoring phenomenon might evolve as societies, worldwide, place increasing emphasis on the environmental impact of business decisions; and (d) articulate a plausible scenario in which reshoring eventually hampers employment in Western nations. We hope these assertions will, in turn, jumpstart an intellectual discourse, through scientific research, into the what, how, when, where, and why of the reshoring phenomenon.

Firms are increasingly sourcing innovation from their supply chain partners. Meanwhile, supply chains have evolved into complex networks, which complicates the role that supply chain partners play in innovation and financial performance of firms. Previous research has mainly focused on the direct effect of innovation on a firm's financial performance, overlooking the innovativeness and complexity of supply networks. In this research, we focus on a firm's supply base, defined as the first tier of a supply network, and investigate the relationship between the intensity of R&D within the supply base and the financial performance of the focal firm. We also examine the moderating role of three aspects of supply base complexity-Number of suppliers, differentiation, and interrelationships among suppliers. Utilizing secondary data from Bloomberg and Compustat, we find that the R&D intensity of a firm's supply base is positively associated with the firm's financial performance. Further, all three aspects of supply base complexity negatively moderate this relationship. These findings make important contributions to the literature by establishing a direct, positive relationship between supply base R&D and firm financial performance, which is attenuated by complexities within the supply base.

While opportunism has been a focus of transaction cost economics, perceived opportunism, where one party is perceived to be acting opportunistically when there is no opportunistic intent, can also lead to increased transaction costs in an exchange. In this study, consistent with forms of opportunism observed in our context of manufacturing outsourcing, we examine two different forms of perceived opportunism-perceived poaching and shirking. As narratives of the hidden costs of outsourcing discuss concerns of suppliers in emerging economies engaging in poaching and shirking, we examine if the level of economic development where a supplier operates affects perceptions of supplier poaching and shirking and also examine if the supplier's competitive priorities moderate those perceptions. To empirically test these relationships, we combine archival data of location characteristics with a dyadic primary dataset that captures perceived supplier opportunism, self-reported supplier opportunism,

Manufacturers are often placing their intellectual property (IP) at risk by outsourcing to suppliers in countries with weak IP rights. Thus, understanding how to safeguard their IP from poaching, which is a supplier's unauthorized use of a buyer's proprietary information, is of critical practical importance for manufacturers that outsource to suppliers in countries with weak IP rights. To investigate this phenomenon, we use dyadic data from globally dispersed manufacturer–supplier relationships to examine how the IP rights of a supplier's location affects poaching and how IP rights influence the effectiveness of two transactional characteristics—supplier idiosyncratic investments and media‐rich communication—on poaching. We examine these two transaction characteristics because they are representative of two forms of safeguards which create self‐enforcing agreements that do not require legal enforcement—economic and relational. We find that the strength of IP rights not only has a direct effect on poaching, but it also influences the relationships for both transaction characteristics. Intriguingly, when IP rights are weak, we find that not only are supplier idiosyncratic investments less effective in reducing poaching, but increases in these investments are associated with an increase in poaching. This finding illustrates that the strength of IP rights is a determinant of the degree to which supplier idiosyncratic investments are transaction specific. For suppliers in countries with weak IP rights, media‐rich communication is found to be more effective in reducing poaching. This finding illustrates the importance of manufacturers’ boundary spanners in building relationships with suppliers in countries with weak IP rights.

Firms must continually adjust their operations and those of their supply chain members in response to a continually evolving external environment. Many of these modifications are non‐contractible in that firms cannot devise and enforce contracts on these behaviors. In this research, we extend property rights theory of the firm (PRTF) by suggesting that small entrepreneurs’ ownership of assets used to perform delegated tasks does not always incentivize small entrepreneurs to undertake non‐contractible actions (NCAs) as assumed by canonical PRTF. We argue that the ability of asset ownership to incentivize small entrepreneurs to undertake NCAs will be muted when undertaking NCAs reduces small entrepreneurs’ productivity. We test our hypotheses by examining how trucking companies’ use of independent contractors affected the rate at which they improved compliance with different types of safety rules following a major regulatory change. Consistent with our arguments, we find that the use of independent contractors slowed carriers’ rate of firm‐wide improvement on compliance with hours‐of‐service and vehicle maintenance rules relative to driving safety rules. These results, which remain after extensive robustness testing, have important implications for theory and practice.

Globalization has added a layer of complexity to the challenge of mitigating opportunism in buyer-supplier relationships. When engaging with suppliers in different countries, buyers must manage relationships across various cultures. Prior empirical research has shown that inter-firm power affects opportunism in exchange relationships, and conceptual studies suggest that national culture is a location characteristic that could influence inter-firm power. However, no research has empirically examined the efficacy of inter-firm power in controlling opportunism, or other exchange outcomes, across different cultural contexts. To study this relevant issue, we investigate how a supplier's national culture influences the effectiveness of two bases of inter-firm power, coercive and expert power, on a form of opportunism that has been anecdotally observed in practice-supplier shirking. We utilize primary dyadic data on 109 outsourcing relationships and secondary data of supply chain location characteristics to examine this phenomenon. We find that the effects of interfirm power on shirking vary across suppliers in different cultures and that, in certain cultures, coercive power may reduce the effectiveness of expert power.Our results show that manufacturers must explicitly consider suppliers' national culture when managing a globally dispersed supply base or risk encountering supplier shirking.