We investigate the relationship between backshoring of production activities and digital manufacturing technologies, also known as Industry 4.0 (I4.0). We argue that I4.0 supports backshoring because it provides a higher productivity and flexibility which offers an incentive for firms to locate production close to their European customers.The empirical test is based on a large dataset of more than 2,000 manufacturing firms. Backshoring is still a rare event with a share of no more than 4% of all firms. Descriptive statistics as well as regression results indicate a positive correlation between the adoption of I4.0 technologies and companies' backshoring propensity.
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