'Manufacturing is coming home': does reshoring improve perceived product quality?. Issue 6 (7th April 2020) - Cassia, Fabio
Abstract : Purpose: Recently, many firms have reshored manufacturing activities back to their home countries to increase customer perceptions of product quality. However, there is no evidence that relocating production to the home country improves customer-perceived quality. This study intends to address this gap by assessing the variations between pre- and post-reshoring product quality, as perceived by domestic customers. Design/methodology/approach: Data were collected through a questionnaire, which used the case of an Italian fashion brand that had reshored its manufacturing from Romania to Italy as the stimulus. Two analyses of the collected data ( n = 399) were conducted, applying both 2 × 2 × 2 factorial design and partial least squares–structural equation modelling (PLS–SEM) multigroup analysis. Findings: Reshoring increased the level of perceived product quality only for customers that both were aware of the firm's past offshoring decision and had high levels of affective ethnocentrism. For all other customers, no significant variations between pre- and post-reshoring product quality were observed. Research limitations/implications: This study challenges previous findings, revealing that only a minor share of customers perceived products to be of higher quality after reshoring. Practical implications: Increasing customer-perceived quality may not be a sufficient motivation to select the reshoring strategy. In addition, when announcing reshoring strategies, producers should appeal to customers' emotions and not use rational arguments about objective product quality. Originality/value: This is the first study to assess variations between pre- and post-reshoring customer-perceived quality and to identify factors that explain such variations.