Environmental Performance Feedback and Timing of Reshoring: Perspectives from the Behavioural Theory of the Firm

Abstract

The behavioural theory of the firm (BTOF) claims that firms' performance feedback is significant for strategic decision-making. Building upon this, we shift our focus from the widely researched topic of financial performance to sustainability performance. We theorize that firms' environmental performance feedback (i.e. performance relative to aspirations) influences their reshoring decisions. Based on a sample of publicly traded manufacturing multinational enterprises (MNEs) from 15 developed countries, we find that firms with below-aspiration environmental performance (BEP) are slower to engage in reshoring activity. In contrast, firms with above-aspiration environmental performance (AEP) are quicker to engage in reshoring. Moreover, we substantiate the moderating role of financial performance feedback: positive financial performance feedback enables firms with higher BEP to engage in reshoring activity even more slowly. Nevertheless, the moderating role of positive financial performance feedback has not been confirmed in the relationship between higher AEP and the timing of reshoring.

From Global to Glocal: Digital Transformation for Reshoring More Agile, Resilient, and Sustainable Supply Chains

“…Reshoring offers a multi-faceted approach to environmental sustainability [8]. One notable benefit is the significant reduction in transport emissions achieved by shortening the distance goods travel, resulting in lower fuel consumption and greenhouse gas emissions.…”

Reshoring: A Road to Industry 4.0 Transformation

“…Zhang et al. (2022) apply the behavioural theory of the firm to understand how environmental performance feedback influences reshoring decisions, and Fjellström et al. (2023) propose the knowledge ambiguity framework to investigate the role of knowledge transfer in dynamic manufacturing relocation.…”

“…Reshoring decision considering stakeholders and environmental regulation (Sena et al, 2022) Reshoring of manufacturing operations in SDGs context (Choudhary et al, 2022;Fjellström et al, 2023;Zhang et al, 2022) Prior research on reshoring the localization of products and services as the future of global manufacturing cannot be ignored. Moreover, localization as a phenomenon originated from the need to offer content in various languages.…”

“…This special issue on reshoring and SDGs represents the culmination of work by various scholars in the fields of international business, international marketing and international trade. The contributed papers provide valuable insights into the reshoring literature by examining the decisionmaking processes (Sena et al, 2022), consumer perceptions (Dey et al, 2022;Foroudi et al, 2022;Gillani, Kutaula and Budhwar, 2022) and various factors influencing the reshoring of manufacturing operations (Choudhary et al, 2022;Fjellström et al, 2023;Zhang et al, 2022) in the context of SDGs. Choudhary et al (2022) challenge the assumption that reshoring automatically enhances supply chain sustainability, arguing for a more nuanced understanding of reshoring as a system reconfiguration.…”

“…Dey et al (2022) develop a consumer behaviour framework for reshored brands, emphasizing the significance of positive consumer attitudes on purchase intentions, while Sena et al (2022) examine the role of external stakeholders and countrylevel environmental regulation in reshoring decisions. Zhang et al (2022) apply the behavioural theory of the firm to understand how environmental performance feedback influences reshoring decisions, and Fjellström et al (2023) propose the knowledge ambiguity framework to investigate the role of knowledge transfer in dynamic manufacturing relocation. We summarize these contributing papers in Table 1 and position them in the landscape of reshoring research as visualized in Figure 1.…”