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Consumer Reshoring Sentiment and Animosity: Expanding Our Understanding of Market Responses to Reshoring

Abstract

Although an increasing body of research has focused attention on reshoring, namely, a company’s decision to relocate activities back to the home-country, how and when reshoring impacts market responses remains largely understudied and requires specific theoretical and empirical consideration. Our study complements existing research on reshoring by adopting a demand-side perspective. Through multiple, experimental and survey-based studies, conducted in two countries (Italy and the US), we verified that the interplay between Consumer Reshoring Sentiment (CRS) and Consumer Animosity (CA) leads to specific emotional reactions (gratitude and relief) which, in their turn, affect relevant market responses (positive word of mouth, willingness to buy, advocacy behaviors). Our work provides interesting insights for practitioners and international managers evaluating reshoring; they can capitalize on the positive market responses to reshoring by considering both reshoring sentiments characterizing the home-country market and consumer animosity associated with tensions between the countries involved in the reshoring decision.

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Fig. 1
Fig. 2

Notes

  1. 1.

    The demographic characteristics of people that were excluded were compared with those of participants included, and results show that they did not systematically differ in terms of gender [χ2(df) = 2.45(2), p = 0.29], age [χ2(df) = 10.93(6), p = 0.09], and education [χ2(df) = 6.99(4), p = 0.14]. The proportion of those who failed the check did not differ between groups [14.3% and 13.7% for the two manipulated groups, χ2 (df) = 0.01 (1), p = 0.91].

  2. 2.

    In order to demonstrate the discriminant validity between measures of CA and CRS, we run a χ2 comparison test using LISREL. The correlation between CRS and CA was 0.17; t = 1.98. The model imposing perfect correlation between CA and CRS and the model without this constraint were compared. The χ2 test was significant (Δχ2 = 7.83; Δdf = 1; p < 0.05) confirming that CA and CRS are different constructs. This result is consistent throughout the studies. The same analysis was run for assessing the discriminant validity between CE and CRS. Also in this case the χ2 test was significant (Δχ2 = 10.26; Δdf = 1; p < 0.05), confirming that measures of CE and CRS are different constructs, consistent with Grappi et al. (2018).

  3. 3.

    The demographic characteristics of people excluded were compared with those of participants included, and results show that they did not systematically differ in terms of gender [χ2(df) = 3.30(2), p = 0.19], age [χ2(df) = 10.49(6), p = 0.08] and education [χ2(df) = 6.40(4), p = 0.17]. The proportion of participants who failed the check did not differ between groups [11.5% and 6.5% for the two manipulated groups, χ2 (df) = 1.82 (1), p = 0.18].

  4. 4.

    To control for possible demand effects due to the CRS measures, we conducted a new study following the same procedures illustrated for Study 2 but changing the way in which CRS is measured; we moved the CRS scale to the end of the questionnaire after having assessed all the other variables. We collected data during the last 2 weeks of March 2019 on a sample of 79 adult Italian consumers: 46.8% men; 27.4% between 18 and 29 years of age, 32.9% between 30 and 49 years of age, 34.3% between 50 and 70 years of age, and the remaining 5.4% over 70 years of age. Undergraduate or higher educated respondents accounted for 21.5% of the sample, followed by respondents with a high school education (34.2%) or less (44.3%). The level of CA toward the foreign country of the two conditions was different [Mchina = 3.41, Mspain = 2.33; t(77) = 3.24, p < 0.01], as expected. A moderated mediation analysis using Model 7 of the PROCESS macro (Hayes 2013) was run. Results were consistent with those presented in the main study (Study 2); gratitude and relief mediate the effect of CRS on the intention to adopt advocacy behaviors and the effect of CRS on the two mediators is moderated by CA. Therefore we can conclude that possible demand effects due to the way in which CRS is measured in the questionnaire are not a major problem in this work.

  5. 5.

    No difference between the excluded and the included participants was found in terms of gender [χ2(df) = 0.46(1), p = 0.50], income [χ2(df) = 5.33(5), p = 0.38], education [χ2(df) = 4.95(5), p = 0.42], and age [t(df) = 0.51(343), p = 0.61].

  6. 6.

    To strengthen the testing of our hypotheses, we also run analyses that explicitly took into consideration the role of CE as possible moderator in the model. CE is defined as the “beliefs held by consumers about the appropriateness, indeed morality, of purchasing foreign-made products” (Shimp and Sharma 1987: 280). It encompasses issues such as the morality of buying imported products and a personal prejudice against imports. Ethnocentric consumers consider buying national products as part of their duty to their country (Zeugner-Roth et al. 2015). Thus CE can be considered as a contiguous dimension from the theoretical point of view with the constructs under study, and the validity and reliability of the proposed model can be improved by taking its possible moderation role into consideration in the model in Fig. 1. Thus we control for this by inserting CE into the hypothesized model. Results showed that CE does not change the mechanisms underlining market responses to reshoring; CE did not moderate the effects of (a) CRS on emotions, (b) emotions on market responses, and (c) CRS on market responses (with the only exception of word of mouth).

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Acknowledgements

The authors would like to thank the editors and the two anonymous reviewers for their useful comments and suggestions.

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Correspondence to Silvia Grappi.

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Grappi, S., Romani, S. & Bagozzi, R.P. Consumer Reshoring Sentiment and Animosity: Expanding Our Understanding of Market Responses to Reshoring. Manag Int Rev 60, 69–95 (2020). https://doi.org/10.1007/s11575-019-00399-2

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Keywords

  • Reshoring
  • Location strategy
  • Consumer reshoring sentiment
  • Consumer animosity
  • Market responses