Made in France and reshoring in multi-regional input-output tables

Made in France, defined as the French value added content of the French final domestic demand, fell by 11 points between 1965 and 2019, from 89% to 78%. This downward trend is common to European countries and reflects the increasing globalisation of recent decades. The location of a production facility in France has repercussions throughout the value chain. These knockon mechanisms via suppliers increase the favorable effects of setting up a new plant on economic activity and employment in France, relative to the creation of a similar facility abroad. The knockon effect, defined as the total value added of the new plant and its suppliers compared to the value added of the new plant alone, and simulated here under the strong assumption that the supply chain of the new plant is similar to those of existing firms, would be around 2.0 in manufacturing industry and 1.6 in market services. As the greenhouse gas production intensity is currently lower in France than in the rest of the world, producing in France rather than abroad also has a potentially favorable effect on global greenhouse gas emissions, assuming consumption remains unchanged. This increases domestic emissions but reduces the country’s carbon footprint.