Technology, geography, and diversification in a small mineral economy

Lufin, Marcelo and Soto-díaz, Juan (2022) Technology, geography, and diversification in a small mineral economy. Extractive Industries and Society, 11. ISSN 2214-790X

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Abstract

When should a policymaker promote economic diversification in resource-rich regions? What are the necessary structural economic conditions for such policies to work? How compatible are regional and national strategies of diversification? This study focuses on the general equilibrium properties of policies that aim to diversify the economic structure of regions through productive linkages with the resource sector. Using Chile, a major mineral exporter, as a case study, and exploiting variation induced by the expansion of the mining industry and the commodity prices super-cycle, we analyze how a shock in the resource sector affects other sectors and regions through productive linkages. The results are utilized in simulating the economic conditions under which regional diversification is an optimal strategy for resource-based economic development. Our results support the need for a multiscalar approach for resource-driven economic development policies by showing that optimal outcomes of diversification policies on economic growth are found when policies combine regional, sectoral, and national strategies for development.

Item Type:	Article
Official URL:	https://www.sciencedirect.com/journal/the-extracti...
Additional Information:	© 2022 The Authors
Divisions:	Geography & Environment
Subjects:	T Technology > TN Mining engineering. Metallurgy H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor
Date Deposited:	29 Apr 2022 14:27
Last Modified:	30 Nov 2024 18:45
URI:	http://eprints.lse.ac.uk/id/eprint/115013

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