We investigate the relationship between backshoring of production activities and digital manufacturing technologies, also known as Industry 4.0 (I4.0). We argue that I4.0 supports backshoring because it provides a higher productivity and flexibility which offers an incentive for firms to locate production close to their European customers. The empirical test is based on a large dataset of 1700 manufacturing firms from Austria, Germany, and Switzerland. Backshoring is still a rare event with a share of around 4% of all firms. Descriptive statistics as well as regression results indicate a positive correlation between the adoption of I4.0 technologies and companies´ backshoring propensity.
- Innovation Systems and Digitalisation
- Industry 4.0