The impact of reshoring decisions on shareholder wealth

Emma Brandon-Jones, Marie Dutordoir, Joao Quariguasi Frota Neto, Brian Squire

Research output: Contribution to journalArticle

  • 4 Citations

Abstract

Interest in reshoring, defined as the return of manufacturing and service operations from previously offshored locations to the U.S., has gained momentum recently. Yet, there is no academic evidence on the shareholder value implications of reshoring decisions. This paper analyzes the shareholder wealth effects of 37 reshoring decisions announced by U.S. firms during 2006–2015. Our results indicate that reshoring announcements result in positive abnormal stock returns. Mean (median) abnormal stock returns on reshoring announcements are 0.45% (0.29%), corresponding with a mean (median) market value change of $322.57 million ($31.60 million). Our findings imply that the benefits associated with the reshoring tend to outweigh the costs. This finding is relevant for firms faced with the decision of whether to move business activities from offshore to domestic locations. It is also of interest to policy makers who may seek to further stimulate the reshoring phenomenon.
LanguageEnglish
Pages31-36
JournalJournal of Operations Management
Volume49-51
Early online date28 Jan 2017
DOIs
StatusPublished - 1 Mar 2017

Fingerprint

Shareholders
Momentum
Costs
Industry
Shareholder wealth
Stock returns
Median
Announcement

Cite this

The impact of reshoring decisions on shareholder wealth. / Brandon-Jones, Emma; Dutordoir, Marie; Quariguasi Frota Neto, Joao; Squire, Brian.

In: Journal of Operations Management, Vol. 49-51, 01.03.2017, p. 31-36.

Research output: Contribution to journalArticle

Brandon-Jones, Emma ; Dutordoir, Marie ; Quariguasi Frota Neto, Joao ; Squire, Brian. / The impact of reshoring decisions on shareholder wealth. In: Journal of Operations Management. 2017 ; Vol. 49-51. pp. 31-36
@article{3a15180298204481916d311c8921ea92,
title = "The impact of reshoring decisions on shareholder wealth",
abstract = "Interest in reshoring, defined as the return of manufacturing and service operations from previously offshored locations to the U.S., has gained momentum recently. Yet, there is no academic evidence on the shareholder value implications of reshoring decisions. This paper analyzes the shareholder wealth effects of 37 reshoring decisions announced by U.S. firms during 2006–2015. Our results indicate that reshoring announcements result in positive abnormal stock returns. Mean (median) abnormal stock returns on reshoring announcements are 0.45{\%} (0.29{\%}), corresponding with a mean (median) market value change of $322.57 million ($31.60 million). Our findings imply that the benefits associated with the reshoring tend to outweigh the costs. This finding is relevant for firms faced with the decision of whether to move business activities from offshore to domestic locations. It is also of interest to policy makers who may seek to further stimulate the reshoring phenomenon.",
author = "Emma Brandon-Jones and Marie Dutordoir and {Quariguasi Frota Neto}, Joao and Brian Squire",
year = "2017",
month = "3",
day = "1",
doi = "10.1016/j.jom.2016.12.002",
language = "English",
volume = "49-51",
pages = "31--36",
journal = "Journal of Operations Management",
issn = "0272-6963",
publisher = "Elsevier",

}

TY - JOUR

T1 - The impact of reshoring decisions on shareholder wealth

AU - Brandon-Jones,Emma

AU - Dutordoir,Marie

AU - Quariguasi Frota Neto,Joao

AU - Squire,Brian

PY - 2017/3/1

Y1 - 2017/3/1

N2 - Interest in reshoring, defined as the return of manufacturing and service operations from previously offshored locations to the U.S., has gained momentum recently. Yet, there is no academic evidence on the shareholder value implications of reshoring decisions. This paper analyzes the shareholder wealth effects of 37 reshoring decisions announced by U.S. firms during 2006–2015. Our results indicate that reshoring announcements result in positive abnormal stock returns. Mean (median) abnormal stock returns on reshoring announcements are 0.45% (0.29%), corresponding with a mean (median) market value change of $322.57 million ($31.60 million). Our findings imply that the benefits associated with the reshoring tend to outweigh the costs. This finding is relevant for firms faced with the decision of whether to move business activities from offshore to domestic locations. It is also of interest to policy makers who may seek to further stimulate the reshoring phenomenon.

AB - Interest in reshoring, defined as the return of manufacturing and service operations from previously offshored locations to the U.S., has gained momentum recently. Yet, there is no academic evidence on the shareholder value implications of reshoring decisions. This paper analyzes the shareholder wealth effects of 37 reshoring decisions announced by U.S. firms during 2006–2015. Our results indicate that reshoring announcements result in positive abnormal stock returns. Mean (median) abnormal stock returns on reshoring announcements are 0.45% (0.29%), corresponding with a mean (median) market value change of $322.57 million ($31.60 million). Our findings imply that the benefits associated with the reshoring tend to outweigh the costs. This finding is relevant for firms faced with the decision of whether to move business activities from offshore to domestic locations. It is also of interest to policy makers who may seek to further stimulate the reshoring phenomenon.

UR - http://dx.doi.org/10.1016/j.jom.2016.12.002

UR - http://dx.doi.org/10.1016/j.jom.2016.12.002

U2 - 10.1016/j.jom.2016.12.002

DO - 10.1016/j.jom.2016.12.002

M3 - Article

VL - 49-51

SP - 31

EP - 36

JO - Journal of Operations Management

T2 - Journal of Operations Management

JF - Journal of Operations Management

SN - 0272-6963

ER -