original: Agroindustry location under output price uncertainty

Song-ken Hsu and Lin-ti Tan
Additional contact information
Song-ken Hsu: Institute of Economics, Academia Sinica, Nankang, Taipei 115, Taiwan
Lin-ti Tan: Department of Industrial Economics, Tamkang University Tamsui, Taipei 25137, Taiwan

The Annals of Regional Science, 1999, vol. 33, issue 3, 289-303

Abstract: Although the location theory of industry has received much attention in the literature, Hsu (1997) has demonstrated that the theory developed to date is not applicable to an agroindustry, that is, the industry of processing the agricultural product. Recognizing that the complete analysis of Hsu (1997) has been conducted in a deterministic world, and that in an economy subject to spatial friction, market information about prices is often incomplete and costly, the firm, accordingly, faces many types of uncertainty in making its location decision. This paper attempts to develop systematically the theory of plant location for an agroindustrial firm under output price uncertainty. Our analysis shows that the presence of output price uncertainty has significant influence on an agroindustrial firm`s location decision. Most pointedly, a risk-averse agroindustrial firm`s choice of production location under output price uncertainty always differs from the one under certainty. It also demonstrates that in many respects, the implication of output price uncertainty for an agroindustrial firm is in sharp contrast to its non-agroindustrial counterpart.

Date: 1999-08-23
Note: Received: November 1997 / Accepted: March 1998
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.de/link/service/journals/00168/papers/9033003/90330289.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:33:y:1999:i:3:p:289-303

Ordering information: This journal article can be ordered from
http://link.springer.com/journal/168

Access Statistics for this article

The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase

More articles in The Annals of Regional Science from Springer, Western Regional Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().