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The traditional way to link to source files in a setup project is to create a reference to that file using a hard-coded path. For example, you might have a source file called Program.exe located at C:\Work\Files that you want to include in your setup.
If you use hard-coded paths, you have to enter the entire path every time you want to associate a source file from that directory. If you move the file to another directory, you have to change the hard-coded path as it appears in your setup project. If your setup consisted of a small number of source files, this might not be a problem. Unfortunately, some setups contain thousands of files that all need to be remapped if you change the folder structure or migrate the project to a different machine.
With path variables you can define commonly used paths in a central location so you do not need to change every source file's path each time you move the project or change the directory structure. In the previous example, if you keep all of your application's source files in various subfolders under C:\Work\Files, you could create one variable that points to the Files folder—<MyFiles>. If you want to include a file that is in C:\Work\Files\Images, you enter <MyFiles>\Images. If you move your files to D:\Work\Files, you can go to one place, your variable <MyFiles>, and change the folder that it points to.
All path variables can be viewed and modified in the Path Variables explorer, which can be accessed by clicking the Path Variables shortcut on the View List. You can use path variables in almost any location in the IDE where you link to source files, such as in the Dialog Editor, dynamic file links, and the release location. Instead of entering the path variables yourself, you can have InstallShield recommend them whenever you browse to a path.

Path variables are used during the development of your setup project. These paths do not apply to the target machines where the application is being installed. Rather, they are used to link to source files for your setup project. When the project is built, those links are evaluated and the files they point to will be built into the setup.
There are four types of path variables that you can use. Each type functions somewhat differently from the others. Regardless of the path variable type you use, the variable name is provided in the same manner throughout the IDE.
| Variable Type | Description |
|---|---|
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Predefined path variables are path variables which point to some of the most commonly used folders. Unlike other types of path variables, these values cannot be edited in the IDE. See Predefined Path Variables for more information. |
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The values of registry-based path variables are derived from the registry keys you created. After creating the registry key, you need to set a path variable to this key. See Using Registry Path Variables for more information. |
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Environment path variables are based on the values of your system's environment variables. You can set an environment path variable to an existing environment variable. See Using Environment Path Variables for more information. |
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Standard, or user-defined, path variables are defined through the IDE. You can specify a path variable such as <MyFiles> with a value of “C:\Work\Files”. These variables do not rely on any outside sources, such as the registry or system paths. See Standard Path Variables for more information. |
You also have the option of converting existing static links to path variables with the Convert Source Paths Wizard. This wizard scans your setup project for static links and changes those links to path variables, which makes your project more easily portable.