Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy

No 2015/34: Unpacking investment decisions in biorefineries

Teis Hansen () and Lars Coenen ()
Additional contact information
Teis Hansen: Department of Human Geography & CIRCLE, Lund University; Nordic Institute for Studies in Innovation, Research and Education (NIFU)
Lars Coenen: CIRCLE, Lund University; Nordic Institute for Studies in Innovation, Research and Education (NIFU)

Abstract: The development and diffusion of biorefineries is a central factor in the transition towards a bioeconomy. Such biorefineries, which produce multiple products based on biological material, are heralded as an important opportunity for renewal of the pulp and paper industry in developed countries, facing increasing competition and environmental requirements. However, pulp and paper firms have only made few investments in biorefineries. Examining investment decision in Swedish and Finnish pulp and paper firms, this paper highlights the importance of considering decision-making processes within companies in order to understand the limited diffusion of biorefinery technologies. Further, the paper identifies organisational innovations in the form of new divisions, forward vertical integration, and creation of new value chain relations as central to commercialisation of biorefinery technologies. Theoretically, it argues that the technological innovation systems framework should be complemented with insights on decision-making processes within companies in order to understand the development of emerging technologies.

Keywords: Biorefineries; investment decisions; organisational innovation; pulp and paper industry

JEL-codes: L73; O31; O33; Q55

16 pages, September 11, 2015

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