‘Home-sourcing’ and closer value chains in mature economies: the case of Spanish manufacturing

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Abstract

This paper offers a novel perspective on manufacturing home-sourcing. We present evidence that home-sourcing occurs in the context of a new competitive environment where the relative importance of scale economies versus variety is altered, and a recoupling of innovation and production within industrial ecosystems becomes desirable. We look at the determinants of manufacturing home-sourcing. We find that R&D-intensive businesses with core non-standardized products are more likely to switch sourcing of components to the home economy from abroad. Our findings provide evidence in favour of increasing trends towards closer value chains for knowledge-intensive production, suggesting that the possibilities for (and potential impact of) home-sourcing have not been fully recognised as pathways to industrial and economic renewal in mature economies. The implications for industrial policy are to focus on the resilience of existing national industrial ecosystems and their attractiveness and ability to integrate incoming business opportunities.
Original languageEnglish
Pages (from-to)1567-1584
Number of pages18
JournalCambridge Journal of Economics
Volume42
Issue number6
Early online date6 Aug 2018
DOIs
Publication statusPublished - 9 Nov 2018

Keywords

  • Reshoring
  • home-sourcing
  • manufacturing
  • global value chains
  • GVCs
  • Industrial policy

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