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Letters in Spatial and Resource Sciences
/10.1007/s12076-018-0217-2
O R I G I N A L P A P E R
Regional concentration and national economic growth
in Brazil and Chile
Patricio Aroca1 · Carlos Azzoni2 · Mauricio Sarrias3
Received: 12 October 2017 / Accepted: 27 August 2018
© Springer-Verlag GmbH Germany, part of Springer Nature 2018
Abstract
This paper investigates the hypothesis that the spatial concentration of economic activ-
ity might impair national growth, using the experiences of Brazil and Chile. In the first
stage we have used regional data to estimate country-specific models in which regional
growth is conditioned by a set of controls, considering population density as a measure
of concentration. The results of this stage show that population density has a negative
effect on the growth of Brazilian and Chilean regions. In the second stage we have
simulated the impact of the actual changes in population observed in the regions within
these countries between 1980 and 2010. Using the new densities, we have recalculated
the growth of the regions, generating a new national growth rate as a weighted aver-
age of the estimated growth of the regional economies. The regional deconcentration
observed in Brazil produced less negative results in terms of national growth. While
the Chilean increasing spatial concentration resulted in negative effects for national
growth: the national GDP growth rate was reduced by 0.8% on a yearly basis. These
results replicate the findings of Brülhart and Sbergami (J Urb Econ 65:48–63, 2009)
for Brazil and Chile in their cross-section of countries. Working with regional data
within the countries allowed determine the gains/losses in the national GDP growth
rate, and to point out the effects on each region within the countries.
Keywords Concentration · Growth · Brazil · Chile · Regional policy
JEL Classification R11 · R12 · O47 · N16
B Patricio Aroca
patricio.aroca@uai.cl
Carlos Azzoni
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