Offshoring motivations driven by sustainability factors

This research analyzes firms' motivations for offshoring by investigating the influence of sustainability and using a dataset of 172 European firms. Therefore, it bridges the fields of offshoring strategies and sustainability to supply new insights to firms and policy makers on the impact of sustainability on offshoring decisions. Our findings reveal that firms' sustainable initiatives demotivate offshoring in most cases, independent of their related motivations to delocalize. Corporate Social Responsibility performance discourage offshoring associated with labor cost benefits, energy savings, and the host governments' sustainable programs. Similarly, domestic governments' sustainable initiatives can support firms that renounce to the possible gains given by low labor and energy costs as well as suppliers' proximity and technological progress. Finally, suppliers' sustainable initiatives push firms to offshore due to the domestic countries' disadvantageous taxation and production systems.

Automated summary

This research examines firms' motivations for offshoring and finds that sustainable initiatives reduce the motivation for offshoring in most cases. Corporate Social Responsibility performance discourages offshoring related to labor cost benefits, energy savings, and host governments' sustainable programs. Domestic governments' sustainable initiatives can support firms that forfeit potential benefits, while suppliers' sustainable initiatives push firms towards offshoring.