Environmental performance feedback and timing of reshoring: perspectives from the behavioural theory of the firm

Minhao Zhang, Xiaolong Shui*, Palie Smart, Xiaojun Wang, Jing Chen

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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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.

Original languageEnglish
Pages (from-to)1238–1258
JournalBritish Journal of Management
Volume34
Issue number3
Early online date17 Nov 2022
DOIs
Publication statusPublished - 2 Jul 2023

Bibliographical note

Publisher Copyright:
© 2022 The Authors. British Journal of Management published by John Wiley & Sons Ltd on behalf of British Academy of Management.

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Strategy and Management
  • Management of Technology and Innovation

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