The Offshoring-Backshoring Paradox, Firm Innovation, and the Significance of the Interface between Purchasing and Product Development

Empirical evidence shows that both offshoring and backshoring decisions positively impact firm innovation. Other studies also indicate that both offshoring and backshoring decisions can inhibit firm innovation outcomes. These are paradoxical statements; they describe an offshoring-backshoring paradox that was first talked about by Trefler et al. in 2005 but is still largely understudied. This study draws on two in-depth but distinct case studies to examine the logic behind this paradox using the quality of the purchasing-product development interface that’s been suggested in the literature as a good predictor of innovation performance among both offshoring and backshoring firms