Chile's resource-based export boom and its outcomes: Regional specialization, export stability and economic growth

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.