Localisation of Industry in Chile, 1895–1967: Mining Cycles and State Policy

Abstract

Mining cycles have had an enormous impact in the evolution of the localization of economic activity, in particular of industry, in Chile. The nitrate cycle was characterized by a labour-intensive extraction process and activity which was geographically very concentrated. The copper cycle was geographically more dispersed and its activity more capital-intensive. We stress the role played by the State in the latter de-concentration due to the impact of regional development policies and assess the importance of factor endowments and agglomeration economies, in the localization of the manufacture.JEL categories: N56, N66, N96

The Long Run Development of Chile and the Natural Resources Curse. Linkages, Policy and Growth, 1850-1950

“…As Badia-Miró (2008), Badia-Miró and Yáñez (2015) and Cariola and Sunkel (1983) also confirmed, the first response to the boom in purchasing power of the northern population was the import of low quality manufactured goods, which also drove integration for national market. However, as an example of positive linkage of mining, industrial activities appeared, favoured by the distance of suppliers, both domestic and foreign and the advantage of production closer to the consumer.…”

“…On the other hand, if we consider forward linkages, the situation is different. Home-market effects on nitrate zones (relatively higher wages and concentration of demand in Northern provinces) relied heavily on evolution of nitrates prices (Ortega 2005;Cariola and Sunkel 1983;Badia-Miró 2008;Badia-Miró and Yáñez 2015).…”

Sub-national economic effects of the resources sector in Chile

“…In terms of regional importance, mining cycles have had an enormous impact on the evolution, localization, and industry changes of economic activity in Chile. Because the copper cycle is geographically dispersed and capital-intensive (Badia-Miró & Yañez, 2015), multinational corporations dominate activities in the primary mining regions of Tarapaca (Region I), Antofagasta (Region II), Atacama (Region III), Coquimbo (Region IV), Valparaiso (Region V), and Libertador General Bernardo O'Higgins (Region VI). In 2016, large-scale operations -conducted by 19 private companies and the National Copper Corporation of Chile (hereafter, CODELCO) -accounted for about 6.5 million metric tons (Mt), or 95.2% of the total; medium-scale, by 22 private companies, 5% to 6% of the annual copper production; and sundry small-scale operations, for about 2% (Corporacion Chilena del Cobre (COCHILCO), 2018).…”

The impact of commodity price shocks among regional economies of a developing country

“…The mining cycles have had an enormous impact on the Chilean industry changes. They are geographically dispersed and capital-intensive (Badia-Mir o and Yañez 2015). At the regional level, Chilean copper production is conducted primarily in the Regions of Tarapaca (Region I), Antofagasta (Region II), Atacama (Region III), Coquimbo (Region IV), Valparaiso (Region V) and Libertador General Bernardo O'Higgins (Region VI).…”