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Ethanol Plant Location Determinants and County Comparative Advantage

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  • Lambert, Dayton M.
  • Wilcox, Michael D.
  • English, Alicia
  • Stewart, Lance A.
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    Abstract

    The location of ethanol plants is determined by infrastructure, product and input markets, fiscal attributes of local communities, and state and federal incentives. This empirical analysis uses probit regression along with spatial clustering methods to analyze investment activity of ethanol plants at the county level for the lower U.S. 48 states from 2000 to 2007. The availability of feedstock dominates the site selection decision. Other factors, such as access to navigable rivers or railroads, product markets, producer credit and excise tax exemptions, and methyl tertiary-butyl ether bans provided some counties with a comparative advantage in attracting ethanol plants.

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    File URL: http://purl.umn.edu/45511
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    Bibliographic Info

    Article provided by Southern Agricultural Economics Association in its journal Journal of Agricultural and Applied Economics.

    Volume (Year): 40 (2008)
    Issue (Month): 01 (April)
    Pages:

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    Handle: RePEc:ags:joaaec:45511

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    Web page: http://www.saea.org/jaae/jaae.htm
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    Related research

    Keywords: cluster analysis; comparative advantage; ethanol production; location model; Community/Rural/Urban Development; Environmental Economics and Policy; Political Economy; R1; R3;

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    References

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    1. Bartik, Timothy J, 1985. "Business Location Decisions in the United States: Estimates of the Effects of Unionization, Taxes, and Other Characteristics of States," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(1), pages 14-22, January.
    2. Leistritz, F. Larry & Hodur, Nancy M. & Senechal, Donald M. & Stowers, Mark D. & McCalla, Darold & Saffron, Chris M., 2007. "Biorefineries Using Agricultural Residue Feedstock In The Great Plains," Statistical Series Reports 7323, North Dakota State University, Department of Agribusiness and Applied Economics.
    3. Baker, Allen & Zahniser, Steven, 2006. "Ethanol Reshapes the Corn Market," Amber Waves, United States Department of Agriculture, Economic Research Service, April.
    4. H. Kelejian, Harry & Prucha, Ingmar R., 2001. "On the asymptotic distribution of the Moran I test statistic with applications," Journal of Econometrics, Elsevier, vol. 104(2), pages 219-257, September.
    5. Davis, David E. & Schluter, Gerald E., 2005. "Labor-Force Heterogeneity as a Source of Agglomeration Economies in an Empirical Analysis of County-Level Determinants of Food Plant Entry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(03), December.
    6. Henderson, Jason R. & McNamara, Kevin T., 2000. "The Location Of Food Manufacturing Plant Investments In Corn Belt Counties," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(02), December.
    7. Coughlin, Cletus C & Terza, Joseph V & Arromdee, Vachira, 1991. "State Characteristics and the Location of Foreign Direct Investment within the United States," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 675-83, November.
    8. Munroe, Darla K. & Southworth, Jane & Tucker, Catherine M., 2002. "The dynamics of land-cover change in western Honduras: exploring spatial and temporal complexity," Agricultural Economics, Blackwell, vol. 27(3), pages 355-369, November.
    9. Lambert, Dayton M. & McNamara, Kevin T. & Garrett, Megan I., 2006. "Food Industry Investment Flows: Implications for Rural Development," The Review of Regional Studies, Southern Regional Science Association, vol. 36(2), pages 140-62.
    10. Smith, Eldon D. & Deaton, Brady J. & Kelch, David R., 1978. "Location Determinants Of Manufacturing Industry In Rural Areas," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 10(01), July.
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    Cited by:
    1. Register, D. Lane & Lambert, Dayton M. & English, Burton C. & Jensen, Kimberly L. & Menard, R. Jamey & Wilcox, Michael D., 2012. "Geographical Analysis of US Green Sector Industry Concentration," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119742, Southern Agricultural Economics Association.
    2. Sesmero, Juan P. & Perrin, Richard K. & Fulginiti, Lilyan E., 2012. "Technology, Markets, and Ethanol Plants Shutdown Price," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124915, Agricultural and Applied Economics Association.

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