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Locational Choices of the Ethanol Industry in the Midwest Corn Belt

Author

Listed:
  • Mônica A. Haddad

    (Iowa State University, Ames, IA, USA, haddad@iastate.edu)

  • Gary Taylor

    (Iowa State University, Ames, IA, USA)

  • Francis Owusu

    (Iowa State University, Ames, IA, USA)

Abstract

The Corn Belt has experienced a rapid expansion of corn-based ethanol plants. This has provided researchers the opportunity to examine the relative importance to the renewable fuels industry of several location factors previously identified as important to agro-industries. Using probit regressions, this study identifies the factors significant to ethanol firms’ location decisions in the four-state study area of Iowa, Illinois, Minnesota, and Nebraska. In Iowa and Illinois, where corn is largely ubiquitous, firms move beyond corn supply to consider other localized factors in their decision-making process. Factors such as rail access, population density, and proximity to blending terminals emerge as significant considerations. Probit regressions comparing states reveal the competitive advantages that each offers to ethanol firms. The importance of the findings to economic development professionals is discussed and areas for future research are suggested.

Suggested Citation

  • Mônica A. Haddad & Gary Taylor & Francis Owusu, 2010. "Locational Choices of the Ethanol Industry in the Midwest Corn Belt," Economic Development Quarterly, , vol. 24(1), pages 74-86, February.
  • Handle: RePEc:sae:ecdequ:v:24:y:2010:i:1:p:74-86
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    References listed on IDEAS

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    Cited by:

    1. Stevens, Andrew, 2015. "Fueling Local Water Pollution: Ethanol Refineries, Land Use, and Nitrate Runoff," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205741, Agricultural and Applied Economics Association;Western Agricultural Economics Association.

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    Keywords

    location theory; ethanol; biofuels industry;

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