An Analysis of the Evolution of Renewable Energy Production: The Role of Firms, Institutions, and Markets
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Renewable energy is expected to alleviate dependence on conventional energy sources and benefit society. Ethanol is a major type of renewable energy in the United States with production concentrated in the states of Iowa, Illinois, Minnesota, Nebraska and South Dakota. In this dissertation I provide an evidence-based understanding of changes in the ethanol industry with a focus on the interrelationships among firm-level strategy and the external environment. I use theoretical perspectives from economic geography on the role of small and large firms. First, using evolutionary economic geography theory, firm-specific routines are analyzed. Second, I use relational economic geography theorization to develop conceptualizations about inter-firm (e.g., small and large) and inter-institutional linkages, which are fundamental to changing strategy use. Third, I use the literature on institutional approaches in economic geography and theoretical gaps in understanding the firm to conceptualize how conditions of the external environment (e.g., markets, technologies, and institutions in the local and broader region) interact with firm-level structure (e.g., ownership and managerial), strategy (e.g., partnerships for innovation, production and marketing), and performance (e.g., sales, profits, and innovation). In this dissertation, I use an embedded case study design informed by archival and interview evidence to address a single central research question— What role do firm strategies developed in response to changing external market and policy environments play in the evolution of renewable energy industries? I address innovation, production, and policy segments of the industry value-chain. My primary unit of analysis in this dissertation is the firm, ethanol producers, which I segment into large and small/medium (SME) sided sub-samples. I also examine regional and national policy, university and government research centers, and firms from related industries. The empirical evidence presented in this dissertation suggests ethanol market characteristics (e.g., policy support, commodity input and output markets) alter firm strategy use, which in turn alters industry development. While some characteristics of the ethanol industry are inherent to renewable energy industries (e.g., commodity markets), others are indicative of shifts in larger techno-economic paradigms (e.g., environmental policy priorities). The intellectual merit of this study stems from the application of an integrated theoretically informed conceptualization of industrial change to our understanding of the role of firms in the ethanol industry. This study contributes to the gaps in literature on firms using this exemplary industry. Broader impacts of the dissertation include (i) engaging with key informants from ethanol refineries to improve our understanding of the evolution of the ethanol industry and competitive pressures facing this renewable energy sector; (ii) fostering understanding of multiple methodologies in studying geographic dimensions of firms and industry; and (iii) developing general understanding of interrelationships among the firm's external environment, structure, strategy, and performance, that is, conceptual and methodological.