The effect of reshoring decision announcements on the market value of the firm

This work employs the event study methodology to examine the effect of announcements of manufacturing reshoring on the market value of the firm. Only weak support for a positive average ‘abnormal return’ is found, while the existence of government financial incentives, or whether the announcement reports a ‘set decision’, versus a mere ‘plan to’ reshore, are ineffectual attributes. Moderate support for a positive effect on market value is identified when the firm announces a simultaneous plant closure abroad. Further, for the same sample of firms, the market reaction to offshoring announcements is not statistically significantly different than reshoring.