Spatial Competition and Ethanol Plant Location Decisions
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Sarmiento, Camilo | 2012
Ethanol is one of the fastest growing industries in the United States. This study estimates factors that
impact location decisions for new ethanol plants using logistic regression analysis and spatial correlation
techniques. The results indicate that location decisions are impacted by county agricultural characteristics,
competing ethanol plants, and state-level subsidies. Spatial competition is particularly important.
Existence of competing ethanol plants reduces the likelihood of making a positive location decision, and
this impact decreases with distance. Finally, state-level subsidies are significant and a very important
variable impacting ethanol location decisions. [JEL Classification: C13, C21, C25, C35, Q42]. C 2012
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