Abstract

In the resource-based, export-driven and steadily growing economy of Chile, neither the revenues nor the negative effects of exports are distributed evenly in space. Accordingly, export specialization patterns in Chile must be analyzed on a regional scale to understand the relationships between export diversification, economic growth and dependency. We analyze how the degree of export specialization among Chile's regions is linked to regional GDP growth and to regional export growth. Moreover, by taking a long-term perspective, we can evaluate these relationships during a phase of strong national currency and in the context of an external shock. Our analysis applies the theoretical frameworks of the 'resource curse' and 'Dutch disease' on a regional geographical scale. We identify a tendency towards increased export specialization that is linked in part to high volatility of both GDP growth and export growth. There is also evidence of a growing dependence of Chilean regional economies on export trade. The 1991-2010 period covered by the analysis provides evidence of how external factors, such as high commodity prices and low US dollar exchange rates, foster specialization and weaken non-mineral exports in relative terms, especially in the highly specialized mineral-based regions of Chile. This result is consistent with the application of the Dutch disease thesis on a regional scale. Our analysis also shows the negative short-term effect of an external demand crisis on the mineral export sector and on highly specialized regions. The article concludes by emphasizing the need for a regional perspective on exports and on the effects of external factors within the country. (C) 2014 Published by Elsevier Ltd.