Why reshore? Evidence from Swedish firms

Reshoring, which refers to the relocation of previously offshored activities back to the home country, is a topic of growing interest in the literature. Two primary motivations for reshoring have been identified: the adoption of automation technology by firms and rising wages in offshoring destinations. In this study, we
propose a novel method for identifying and quantifying reshoring using micro-data from Sweden. We then apply this measure to examine the validity of the two reshoring motives. Our findings indicate that reshoring is positively associated with technological advancements within firms, while we find no evidence to support the notion that rising income in offshoring countries prompts reshoring.