Friendshoring as a Strategic Response: Location Decisions for MNEs in a Fractured Global Economy

The idea of friendshoring is examined in this work along with its importance to global value chains (GVCs) and the strategic operations of multinational enterprises (MNEs). Amidst growing global trade instability, geopolitical tensions, and the COVID-19 pandemic’s effects, friendshoring emerges as a critical strategy. It is a practice of relocating supply chain activities to countries that are politically and economically aligned with MNEs’ home country. Ultimately, friendshoring is portrayed as a progressive strategy that can tackle current global issues and positions MNEs for long-term success and sustainable growth in a challenging global environment. However, implementation of friendshoring brings some challenges as well for MNEs, which are also discussed in this work.