Increasing Rates of Paper Recycling and the Locational Behaviour of Newsprint Producing Facilities in Europe

This paper determines the impact wastepaper recovery has on the investment decision for the European pulp and paper industry, with an emphasis on newsprint production. It begins by describing the changes in newsprint production and wastepaper recovery that occurred in the past two decades. A formal model to test the hypothesised implication of increasing wastepaper recovery on the locational choice is then outlined and empirically tested on data from 13 Western European countries. We find a clear correlation between wastepaper recovery and the locational choice for newsprint investment projects, and suggest that this should have policy implications for the recycling of paper. That is, policies that increase wastepaper recovery will have a positive effect on the probability to attract newsprint investment projects.