Is There a Financial Rationale for Onshoring Through Public Procurement?: Evidence from the Train Manufacturing Sector

Following COVID-19 and a multitude of geopolitical tensions, governments across advanced economies have demonstrated renewed enthusiasm for the onshoring of manufacturing activities via public procurement. Whether this represents financial value for taxpayers is less clear. This paper addresses this question by operationalising a framework which adjusts procurement prices for additional corporate financial expenditures generated in the economy when a domestic producer is selected for purchases of passenger trains. Our findings demonstrate that onshore design and manufacture of trains can deliver substantial financial value and the best overall outcome in circumstances where domestic resources are not being gainfully utilised elsewhere.