Researcher, Department of Regional Development and Planning, University of Thessaly, Volos, Greece

Serafeim POLYZOS

Professor, Department of Regional Development and Planning, University of Thessaly, Volos, Greece

Dimitrios TSIOTAS

Assistant Professor, Department of Regional and Economic Development, School of Applied Economics and Social Sciences, Agricultural University of Athens, Amfissa, Greece


Renewable energy sources (RES) are characterized as clean forms of energy and come directly or indirectly from the impact of solar energy on the environment. The overall process of planning, designing, constructing, and operating renewable energy projects involves complex uncertainties and risks, which are difficult to analyze and evaluate effectively through traditional investment appraisal methods. Each RES project presents different types of uncertainties, which are categorized as external and internal. The Real Options (RO) theory for evaluating investments in RES projects can provide additional investment options at different stages of the projects, enhancing flexibility and improving the decision-making ability of a company’s management.

This paper summarizes the specifics governing RES projects, the main characteristics of the RO methodology, and an overall framework for its application to RES projects. This framework is used to evaluate an investment in a 500kWp photovoltaic (PV) park in Greece. The uncertainties selected for the analysis of the RO methodology are the electricity sales price and the production from the specific PV project. In addition, the options/rights of the investor that are considered, are to continue or abandon the investment in each phase of the project implementation. The results, based on the current data and have included the possible fluctuation in the values of the two aforementioned uncertainties, show that investing in a PV project of similar size and technology in Greece is advantageous and worth undertaking. The intention to finance a large proportion of the investment by the banks plays an important role in this.

Keywords: project appraisal methods, real options theory, renewable energy projects, risk and uncertainty analysis, construction project management

JEL classification: R3, R5, R38,

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MSc City Planner, Izmir, Turkey, Tel: +90 554 972 37 64

Hasan Engin DURAN

(Corresponding Author) Izmir Institute of Technology, City and Regional Planning Department, Associate Professor of Economics, Adress: Gülbahce Kampüsü, Izmir Yüksek Teknoloji Ensitüsü, Mimarlık Fakültesi, Şehir ve Bölge Planlama Bölümü, Urla-Izmir, Tel: +90 232 750 70 04


Purpose of the current study is to analyze the determinants of firm location in Izmir’s food industry. The dataset covers 734 firms in 2018. The analyses particularly focus on the impact of experience and size of the firms, the effects of which are not yet adequately analyzed by the existing literature. In terms of methodologies, initially, explorative maps are used to illustrate the data. Then, linear regression analyses are applied to analyze the location behavior determinants. Spatial autocorrelation test is applied to as a robustness test. Our findings point to three main results. First, firm size is not statistically a significant determinant of firm location. So, big firms may locate in/around or out of cities, whereas, also small firms may locate close to or distant from city centers Second, the influence of the experience variable is rather definite; earlier founded firms naturally locate closer to CBD. Third, with regard to results regarding sub-sectors, firms in packaged food and bakery sectors locate nearby CBDs where, in contrast, firms in animal products sector tend to locate in rural areas. Overall, the key lesson that we learn from the analysis is that concentration of large firms around urban areas should be avoided so to cope with environmental problems and to maintain fair competition between big and small firms. Moreover, younger firms should be subsidized (through tax exemptions, rental aid, export and employment subsidies) so that their capital structure remains strong even if they are not able to place close to the market.

Keywords: Location Choice, Food Industry, Determinants, Firm Size

JEL classification: D22, R3

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