Measuring dynamic supply chain risks for the offshoring decision in the post‐COVID‐19 era: A longitudinal study

Hokey Min, Young‐Hyo Ahn and Jin‐Hee Ma

Transportation Journal, 2024, vol. 63, issue 3, 188-206

Abstract: In times of prolonged economic doldrums across the globe, multinational firms (MNFs) offshoring blunders can undermine their competitiveness in the marketplace. To help the MNF formulate a more resilient offshoring strategy and identify the most desirable offshoring destination, this article aims to identify dynamic risk factors that significantly hinder the efficiency of offshoring and then measure specific offshoring risks over time using two different versions of data envelopment analysis (DEA) models and Malmquist productivity index (MPI). After assessing the degree of risk resiliency of the offshoring host countries over extended periods and then conducting Tobit regression analysis to identify key factors that significantly influence offshoring risks, we found that the host country's logistics efficiency (i.e., logistics performance index [LPI]) and domestic market size were critical indicators of offshoring success in that country. Since low‐cost sourcing countries (LCCs) tend to have relatively low LPIs and smaller domestic market sizes, they are not attractive offshoring destinations. This finding defies conventional wisdom. This article is one of the first longitudinal studies to assess the comprehensive risk resilience of 87 different offshoring destinations (countries) during multiple periods (6‐year span).

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/tjo3.12026

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:transj:v:63:y:2024:i:3:p:188-206

Access Statistics for this article

More articles in Transportation Journal from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().