Location decisions and regulatory changes: the case of the Chilean aquaculture

We study the development of aquaculture activities in Chile and the impacts of regulatory changes on location decision for aquaculture production centers. Our study considers a descriptive analysis on the spatial and temporal development of aquaculture production centers. Next, using a panel data we estimate a site selection model to explore determinant factors of site choices for aquaculture production. Our results suggest a clear pattern for the spatial-temporal development of Chilean aquaculture. The pattern is characterized by a movement of the production centers towards the south of Chilean Patagonia, changing the concentration of the production activities from Puerto Montt to the southern region of Chiloé Island. The estimation of a model of site selection suggests that the distance between production centers and the presence of centers devoted to the production of the same species are relevant in explaining the movement of the production activities towards the southern region. The regulatory changes seem to be important determinant factors for the observed spatial and temporal pattern of development of the aquaculture industry in the country.