Abstract
Abstract This paper identifies and estimates the relative impact that factor input prices, output market size and agglomeration effects have on the choice of location for investment projects in the European pulp and paper industry, with special focus on the price of wastepaper. A conditional logit model is developed to fit investment projects across 16 European countries for the period 1985–1995. The results suggest that factor input prices, in general, and the price for wastepaper, in particular, are neither a statistical nor an economic significant location determinant for a paper manufacturer. Furthermore, the results suggest that market size and agglomeration effects are considered more important than the price of raw material when an investment site is chosen.
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