Factors and their multilevel relationships in global facility location decision making: An integrative review and framework for offshoring and backshoring decisions

Aseem Kinra, Debarshee Bhardwaj and Herbert Kotzab

International Journal of Production Economics, 2025, vol. 289, issue C

Abstract: Research on offshoring and backshoring decisions within the domain of global facility location decisions (GFLD) has traditionally emphasized aggregated decision factors, often overlooking how individual-level perceptions, routines, and managerial interpretations interact with broader regulatory frameworks, cultural norms, and institutional pressures. This gap highlights the need to better integrate micro-strategic considerations, i.e., microfoundations, with macro-institutional conditions. Therefore, this study conducts an integrative literature review to identify and map macro- and micro-level factors and their interrelationships in the context of offshoring and backshoring decisions. For offshoring, we observe strong linkages between firm-level operational priorities and macro-level drivers such as production capabilities and institutional support, as well as managerial and organizational characteristics. In contrast, backshoring decisions are primarily shaped by internal firm capabilities and are associated with macro-level advantages such as job creation, market valuation, and regional economic growth. Our findings further highlight microfoundational influences such as managerial preferences and decision-making heuristics as central to understanding backshoring behavior. By systematically mapping these multilevel relationships, the study contributes a novel decision-making framework for GFLD that integrates strategic and institutional dimensions to support more informed location strategies.

Keywords: New institutional economics; Microfoundations; Facility location; Offshoring; Backshoring; Multilevel research; Integrative literature review (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:289:y:2025:i:c:s092552732500221x

DOI: 10.1016/j.ijpe.2025.109736

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