Received: 29 May 2019 

|
  Revised: 4 September 2020 
|  Accepted: 14 October 2020

DOI: 10.1111/grow.12447

SPECIAL ISSUE

Gateways or backdoors to development? Filtering

mechanisms and territorial embeddedness in the
Chilean copper GPN’s urban system

Miguel Atienza1   | Martín Arias-Loyola1,2   | Nicholas Phelps2

1
Departamento de Economía, Instituto
de Economía Aplicada Regional
(IDEAR), Universidad Católica del Norte,
Antofagasta, Chile
2
Faculty of Architecture, Building and
Planning, University of Melbourne,
Melbourne, VIC, Australia
Correspondence
Miguel Atienza, Departamento de
Economía, Instituto de Economía Aplicada
Regional (IDEAR). Universidad Católica
del Norte, Avenida Angamos 0610,
Antofagasta, Chile.
Email: miatien@ucn.cl
Abstract
This paper analyses the role played by different urban nodes
in the Chilean copper mining Global Production Network
(GPN), and how filtering mechanisms act in favour of the
capital city, limiting the territorial embeddedness of extrac-
tive industry in resource peripheries. In doing so, we make
three contributions to the literature. First, in addition to ob-
serving gateway cities (those connecting the mining hinter-
lands to the global economy), we propose an intermediate
category in urban hierarchies which we label the “backdoor
city” (those that can perform one or more functions of a
gateway city but lack chances for value capture and sustain-
able development outcomes). Second, we analyse the fil-
tering mechanisms that work to the detriment of resources
peripheries. Third, we analyse how these mechanisms re-
duce the territorial embeddedness of mining activity across
the Chilean urban hierarchy. Our main results show that
the capital city of Santiago stands out as the only gateway
city in the country, and Antofagasta acts as a backdoor city
for the Chilean resource peripheries where the extractive
activity is weakly embedded, limiting their development
opportunities.

1  |   IN T RO D U C T ION
The economic geography of extractive Global Production Networks (GPN) has received increasing
attention during the last decade (Atienza et al., 2018; Breul & Revilla Díez, 2018; Bridge, 2008, 2009;
Dicken, 2011; Phelps et al., 2015). However, few works have sought to elaborate on how urban spatial
Growth and Change. 2020;00:1–23. wileyonlinelibrary.com/journal/grow |
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divisions of labour are articulated within GPNs (Atienza et al., 2018; Martinus, 2016, 2017). This type
of analysis is particularly relevant to understanding why, despite the “mining prices supercycle” be-
tween 2003 and 2013 (Humphreys, 2015), resource peripheries were unable to capture the value cre-
ated in their territories and suffered unsustainable growth and dire territorial development outcomes
commonly emphasised in the enclave concept (Arias et al., 2014; Phelps, 2015, 2018; Radley, 2020;
Shade, 2015; Werner, 2016).
The recent combination of GPN and gateway cities' frameworks (Breul, 2020; Breul et al., 2019;
Breul & Revilla Díez, 2018; Scholvin et al., 2019) is important in moderating the global focus of both
GPN and world cities research. It is also valuable in drawing attention to the filtering processes by
which the main urban agglomerations do or do not relay development impulses to peripheral locations
(Scholvin et  al.,  2019). Gateway cities' literature assumes that those cities plug in the hinterlands
with the GPN, while also recognising they might concentrate value capture through different filtering
mechanisms. However, this framework does not acknowledge that filtering mechanisms could lead
to the existence of intermediate categories of cities within the urban hierarchy, what we here label
“backdoor cities,” that play one or some of the basic functions of a gateway city are present, but are
not able to obtain the benefits expected in this type of city. As a result, the value created is mostly cap-
tured by the central nodes of the GPN, deterring the chances for sustainable development in resource
peripheries.
This paper analyses the role played by the Chilean urban agglomerations in the copper GPN. In
doing so, we make two contributions to recent studies on gateway cities and GPN. First, using the
five functions of the gateway cities suggested by Scholvin et al. (2019), we propose the category of
the backdoor city which shares some features of gateways but is unable to promote the conditions for
territorial development; Second, we use recent discussion of filtering (Breul & Revilla Díez, 2018)
to understand how these mechanisms work in Chile to constrain the sustainable integration of mining
peripheries into the copper GPN. For this purpose, we focus our analysis on the consequences of fil-
tering mechanisms on the territorial embeddedness of the mining industry across the Chilean urban
system. Following the cues provided by Atienza et al. (2018), Kleibert (2017), we re-inflect discussion
of the concept of territorial embeddedness with an understanding of it as an input to processes of value
capture and a condition for long term economic development in accordance to older literature on spa-
tial divisions of labour (Massey, 1984; Westaway, 1974) and the branch plant economy (Watts, 1981)
and the recent GPN framework (Coe & Yeung, 2015).
Chile is chosen as a case study due to its historic mono-dependency on mineral resources, as well
as its worldwide reputation as the major producer of copper, lithium, and molybdenum (USGS, 2018).
The country has also been depicted as an example of successful mining-based macroeconomic growth
(especially the region of Antofagasta) by international organisations (CEPAL, 2009; OECD, 2013).
Nonetheless, the literature has shown that the “bright side” of integration into extractive GPN usually
favours the economy of capital city conurbations at the expense of the extractive areas even in the case
of agglomerations that share some of the characteristics of gateway cities (Arias et al., 2014; Phelps
et al., 2015, 2018).
The paper analyses the three main urban conurbations in Chile (Gran Santiago, Gran Valparaíso,
and Concepción) and the main six mining urban agglomerations (Antofagasta,Calama, Copiapó,
Coquimbo-Serena, Iquique, and Rancagua) using secondary information from public sources as well
as a unique micro-level data set of almost 3,500 mining services suppliers from the SICEP database.1
Results show that Gran Santiago is the only gateway city in the Chilean copper GPN. In contrast,
Antofagasta, the main mining agglomeration in the country, functions as a backdoor city that mostly
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connects the extractive periphery with the GPN as a logistical node and supplier of generic services.
This leads to a pattern of very weak embeddedness of the extractive activity in the Chilean mining
cities that can be explained by the filtering mechanisms working to ensure that Gran Santiago captures
most of the benefits of national integration into the copper GPN.
The paper is divided into four sections: first we review how the GPN approach has been connected
to the world cities literature via the concept of gateway cities. We draw on these ideas to propose an
additional category of backdoor cities; we analyse the filtering mechanisms that order interactions
within urban systems and how these mechanisms can affect territorial embeddedness in the extractive
GPN. In the following section, we describe our research methodology. Third, we present the main
results: We describe the position of Chile in within the copper GPN and identify the main gateway
cities of the Chilean copper GPN; afterwards, we analyse the filtering mechanisms at work in Chile;
finally we study how these mechanisms affect the territorial embeddedness of the mining activity in
the Chilean urban hierarchy. In the conclusion, we summarise the main findings of the paper and dis-
cuss their theoretical and policy implications.

2  |   U R BA N NOD E S, F ILT E R ING M ECHANISM S, AND

TE R R ITO R IA L E MB E D D E D N E SS IN EXTRACTIVE GPN

Research on the extractive industries and economic development has revolved around the simplifi-
cation of countries rich in natural resources either being “cursed” (Auty, 1994; Badeeb et al., 2017;
Humphreys et  al.,  2007; Rosser,  2006; Sachs & Warner,  2001) or “blessed” (Gunton,  2003;
Javorcik, 2004; Li & Liu, 2005). Economic geography contributions have converged to finesse this
story, focusing on the degree to which extractive territories are able to sustain value capture, diversify
its productive tissue and reach sustainable territorial development through their insertion into global
markets and networks (Martinus, 2018; Phelps et al., 2015, 2018). To territorialise that discussion, the
GPN framework provides a way to explore uneven development patterns associated with the nexuses
of firms, states, and civil society comprising the “interconnected functions and operations through
which goods and services are produced, distributed and consumed” (Henderson et al., 2002, p. 445).
In this paper, we combine recent contributions on gateway cities and the filtering mechanisms that
constraint the plug-in of resource peripheries into extractive GPN with the generalities of the GPN
approach making use of the more tractable concept of territorial embeddedness.

2.1  |  Gateways and backdoor cities within extractive GPNs

As it happened previously in manufacturing and services activities, the mining industry, once con-
sidered a prime example of vertical integration, is currently characterised by a measure of vertical
disintegration and geographical fragmentation of production both upstream and downstream, with a
growing relevance of mining services suppliers as relevant actors of the GPN (Dicken, 2011; Farooki
& Kaplinsky, 2014; Morris et al., 2012). However, mining territories do not seem to be participating
in the potential gains of the increasing the depth of extractive GPN. Knowledge-intensive activities
are predominantly concentrated in the main urban agglomerations, while extractive areas are usually
specialised in routine and ancillary tasks (Atienza et al., 2018; Martinus, 2018). Furthermore, there is
an increasing the centralisation of corporate activities of mining companies, reducing the role of mine
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4       ATIENZA et al.

sites as a mere source of raw materials (Parker and Cox (2018). While these trends of fragmentation
of production are common to most industries, in the extractive industries the increasing use of long-
distance commuting due to changes in transport technology and the regulation of shift work systems
has led fly-in fly-out (FIFO) to become another of the main mechanisms to transform resource periph-
eries into little more than resource banks (Barton et al., 2008; Martinus, 2017, 2018).
Studies integrating the consideration of how global and national city systems articulate within
extractive GPN remain scarce. An exception is the work by Breul and Revilla Díez (2018), Breul
et al. (2019), and Scholvin et al. (2019), who recover the concept of the “gateway city” to complement
both world cities and GPN approaches, contributing to a better territorialisation of the latter frame-
work. “Gateway cities” are defined as those “places from which the articulation of production and
consumption sites across the nation and/or macro-region into GPN is enabled” (Breul et al., 2019, p.
2). In other words, gateway cities connect hinterlands to the global networks and, in doing so, gen-
erate impulses for peripheral locations to engage in processes of strategic coupling and development
(Scholvin et  al.,  2019). According to these authors, a “gateway city” could display five functions,
which explain how they bridge their hinterlands with the global economy: (1) Logistic and transport
hubs; (2) Industrial processing areas; (3) Corporate control; (4) Service provision; and (5) Knowledge
generation. Importantly, a city does not need to play all those roles to be considered a “gateway city,”
but the more functions there are, the more attractive and retentive the city becomes for regional head-
quarters of Multinational Enterprises (MNEs) and knowledge-intensive activities.
Literature on gateway cities has been explicit on the fact that these cities can produce what Burger
et al. (2015) call “agglomeration shadows” limiting economic development in their surrounding areas.
Furthermore, in some cases, these cities are not able to properly integrate resources peripheries into
GPN leading to forms of structural matching (Breul et al., 2019; Breul & Revilla Díez, 2019). Perhaps
one of the limitations of the gateway cities' literature is that it has tended to use a very broad con-
ception of peripheral areas. This may be imprecise in the case of the extractive GPN where there are
significant differences between large mining cities and small and medium mining towns (Fernández
& Atienza, 2011).
For this reason, we extend this line of research proposing the existence of an intermediate category
between gateway cities and the rest of the resource periphery, that we label backdoor cities. These
cities are globally connected places where most inputs (labour and capital) come from outside and
output (mineral production) is exported, but where mining activity—beyond extraction—is weakly
embedded. Consequently, backdoor cities, can present one or some of the functions of gateway cities,
fundamentally acting as logistic and transport hubs for mineral output and labour, and providing an-
cillary services and industrial processing that require proximity to the deposits, while not promoting
knowledge creation, advanced service provision, or corporate control. A backdoor city will plug in the
resource periphery with the GPN in a highly dependent and unsustainable way. Thus, a backdoor city
could be defined as a gateway city unable to ensure the capture of value within the territory it globally
connects, and incapable to diversify its productive fabric and to promote sustainable developmental
outcomes.
Backdoor cities emerge as a middle ground of economic development outcomes between the suc-
cessful territories associated with gateway cities and the negative outcomes often associated with most
extractive peripheries. Yet, this does not mean that, in the long term and with the appropriate policies,
a backdoor city could become a gateway city. The distinction between gateway and backdoor cities is
particularly useful to understand how the filtering mechanisms identified by Breul et al. (2019) oper-
ate in favour of the core urban areas and to the detriment of the periphery.
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2.2  |  Filtering mechanisms and territorial embeddedness in mining GPNs

The potential role of gateway cities as intermediary nodes that connect peripheral areas with GPN
cannot be taken for granted. As Breul et al. (2019) highlight, gateway cities can exert a filtering effect
to the detriment of the hinterland instead of contributing to its integration in the GPN. In that case,
the dominance of gateway cities in the national urban hierarchy works to the detriment of economic
development in the periphery. Three mechanisms are of note in this regard: (1) Filtering due to the
concentration of regional assets. When gateway cities have a supply of strategic assets (access to
knowledge, labour market, connectivity, proximity to decision-making places, and other kinds of
agglomeration economies), then hinterland cities in comparison are unlikely to prove attractive for
MNEs to embed their operations. (2) Institutional filtering where the highly centralised and/or spa-
tially blind national institutional frameworks and policies can also create incentives for lead firms and
their strategic suppliers to locate in gateway cities. (3) Corporate filtering: where corporate strategies
dictate the extent to which MNEs and other GPN actors are organised in different territories across
an urban system.
Our analysis of the effects of these filtering mechanisms in extractive GPN across the urban hier-
archy focuses on territorial embeddedness, one of the central concepts of this framework, due to its
relevance for economic development opportunities and to its empirical tractability. Territorial embed-
dedness is understood as the extent to which firms and related organisations are “anchored” in a place.
This anchoring reflects the firms’ dependence on local resources, labour force, and service suppliers
and on public policies (Coe et al., 2004; Henderson et al., 2002; Hess, 2004). Hence, territorial em-
beddedness “clearly affect the prospects for economic and social development in given locations”
(Coe & Yeung, 2015, p. 18).
Actors participating in GPN are differentiated by their degree of territorial embeddedness which,
in turn, is vital for regional development outcomes (Coe et al., 2004; Coe & Yeung, 2015) since it
profoundly shapes the distribution of power and value capture between the different actors interacting
within a GPN (Coe et al., 2004; Henderson et al., 2002; MacKinnon, 2012). In Hess (2004) words:
“from a development point of view, then, the mode of territorial embeddedness or the degree of an
actor's commitment to a particular location is an important factor for value creation, enhancement and
capture.” In the language of earlier literature on spatial divisions of labour (Massey, 1984), territorial
embeddedness provides one key means for observing how places are both outputs of and inputs to
sequences of investment and value capture.
Imbued with some of the success of East Asian “developmental states,” the GPN approach alights
on the opportunities for national and local governments to adjust asymmetries—between mobile cap-
ital and immobile communities—to target and territorially embed parts of a GPN in support of urban
economic development and even the formation of new urban nodes (Hess, 2004). In extractive indus-
tries, these asymmetries take a more particular form due to the fixed nature of deposits as recognised
in the bargaining theory (Vivoda, 2009). Resource-holding states are (potentially) large influencers
of the territorial development outcomes (Bridge, 2008, 2009). Through their roles of facilitators, reg-
ulators, producers, and buyers (Horner, 2017), they can mould the spatial configuration of extractive
GPN, where new policies, institutions or actions can help to embed GPN actors into selected terri-
tories (Breul and Revilla Díez, 2018; Stephenson & Agnew, 2016). In theory, states have strong bar-
gaining positions with which to effect strategic coupling and hence positive outcomes with respect to
extractive MNEs, though this bargaining position becomes obsolete over time (Kobrin, 1987). In prac-
tice, however, the full bargaining power of states rarely seems to have been mobilised with respect to
extractive MNEs in more (neo)liberalised contexts, while the asymmetries between MNEs and states
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6       ATIENZA et al.

and civil society groups continue to evolve in complex ways with important implications in terms of
national and international spatial divisions of labour (Martinus, 2016, 2017).
After an exceptionally long period of high mineral prices, the so-called “mining prices supercycle”
between 2003 and 2013 (Humphreys, 2015), resource peripheries have not been able to obtain the ben-
efits expected from their integration in global markets. In contrast, many works show a trend of con-
centration of the strategic assets related to the mining industry in the main urban agglomerations and
a reduction in production linkages in mining territories (Atienza et al., 2018; Fleming et al., 2015);
furthermore, there has been increasing use of long-distance commuting (FIFO of workers), growing
outsourcing of tasks, centralisation of corporate activities, and the (neo)liberalisation of foreign direct
investment (FDI) policies (Atienza et al., 2018; Martinus, 2016, 2017, 2018; Parker & Cox, 2018;
Phelps et al., 2015).These latter dynamics stem from a host of effects of the urban concentration of
key corporate functions (Massey, 1984; Westaway, 1974), intra-corporate, parent-subsidiary and sub-
sidiary-host environment relationships (Phelps & Fuller, 2000, 2016) and product life cycle-related
possibilities for the decentralisation of production (Erickson, 1976; Howells, 1983).
It is also important, however, to analyse the role of cities in extractive GPN as the main nodes
through which the benefits of integration into GPN spread across the urban systems. In this respect, it
seems that gateway cities have not been fulfilling their function of integrating resource peripheries into
global networks. In contrast, it seems that these cities have captured most of those benefits. Strikingly,
the GPN literature has tended to draw attention to “bright side” urban and regional development out-
comes associated with the dispersed sources of power implicated with the territorial embeddedness of
actors—notably within MNEs (Phelps et al., 2018). However, consideration of filtering mechanisms
as these shape the territorial embeddedness of some of those same actors helps further specify the
important recursive relationships of extant urban spatial divisions of labour (Massey, 1984) as these
continue to shape value capture opportunities within GPNs.
In the next sections, we empirically assess the role of Chilean urban agglomerations in the copper
GPN, noting the main gateway and backdoor cities and the extent to which filtering mechanisms shape
the territorial embeddedness of mining activity in resource peripheries, constraining their develop-
ment opportunities.

3  |   M ET H OD O LO GY
Our analysis is fundamentally quantitative and based on public secondary information and a rich
micro-level data set of almost 3,500 mining services suppliers from the SICEP database. This is
highly representative of the universe of supplier firms in Chile, estimated in a total of around 4,000
(Fundación Chile, 2014, 2015).
Our units of analysis are the main nodes of the Chilean copperGPN within Chile, comprising the
three main urban conurbations in Chile (Santiago—the capital city of Chile), Gran Valparaíso and
Gran Concepción), and the main six mining urban agglomerations (Antofagasta, Calama, Copiapó,
Coquimbo-Serena, Iquique, and Rancagua),2 where more than 90% of the mineral output is extracted.
Mining cities are defined as those municipalities with location quotient (LQ) of employment in metal-
lic mining are equal or greater than 2. An LQ of 2 for a given municipality means that such a munici-
pality has twice as much share of employment in metallic mining as the country (Map 1).
Our analysis has three stages: in the first one, we identify the gateway and backdoor cities in the
Chilean mining industry based on secondary information and considering the five functions proposed
by Scholvin et al. (2019) presented above. In a second stage, we analyse the filtering mechanisms
identified by Breul et al. (2019) that can constrain the role of gateway cities in connecting the main
ATIENZA et al.   
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M A P 1   Urban conurbations and mining municipalities, 2017. Source: Authors based on National Statistics
Institute (INE)

national urban agglomerations to the resources peripheries, reducing territorial embeddedness and
their capacity for economic development, based on historical analysis and an interpretation of the
results of previous works. Finally, we study the consequences of the filtering mechanisms on the ter-
ritorial embeddedness of the mining industry in the Chilean urban system using Kleibert (2015) and
Atienza et al. (2018) criteria, considering the following indicators: fixed investment made by mining
companies; productive linkages; participation of indigenous mining service suppliers in urban nodes;
and the degree of complexity and sophistication of the functions performed by the different urban
nodes.
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8       ATIENZA et al.

In the third stage, we have also included the analysis of labour embeddedness due to its relevance
in the mining industry in light of the increasing prevalence of long-distance commuting arrangements.
For the analysis of territorial embeddedness, we use information from the SICEP database about the
location of headquarters and branches and classification of 16 types of services provided by mining
suppliers used in Atienza et al. (2018) and information from the National Employment Survey to study
long-distance commuting.

4  |   R E S U LTS
This section is organised in four parts: first, we make a brief introduction to the position of Chile in
within the copper GPN; second, we identify the main gateway and backdoor cities of the copper GPN;
third, we evaluate the filtering mechanisms at work in Chile; and finally, we study how these mecha-
nisms affect the territorial embeddedness of mining activity in the Chilean urban hierarchy.

4.1  |  The Chilean copper mining GPN

The copper mining GPN is characterised by its high concentration of deposits, output, and interna-
tional trade. In 2016, the top ten countries in the network represented close to 80% of the worldwide
copper reserves and production of copper mining, copper smelter, and refined copper (COCHILCO,
2019; U.S. Geological Survey, 2018). Within this group, Chile is the undisputed leader in copper re-
serves (29.2%) and production (26.8%). However, Chile's share in refined copper production (11.1%)
and copper smelter production (8.6%) is significantly smaller, due to the aggressive policy followed
by China (Humphreys,  2015), aimed at producing copper with more value added by fostering the
development of the smelter and other copper by-products’ industries.
The position of Chilean leadership within the copper mining GPN weakens when considering the
ownership and control over lead companies within the network. The top ten lead companies represent
almost 50% of world copper production in 2014 (Atienza et al., 2018), depicting a GPN organised as
a “lead-firm centric” network. While nine of these lead firms have mining operations in Chile, only
CODELCO, the public company, and world leader in copper production (Thomson Reuters, 2015),
can be considered a Chilean company. Consequently, Chilean participation in the copper GPN relies
heavily on FDI and mining MNEs, a historical dependency maintained since the late XIX century
(Arias et al., 2014).
During the early 1990s (after the return to democracy), changes in FDI regulation led to the
large arrival of mining MNEs to the country and, since then, the mining industry has concentrated
around a third of the total annual greenfield and brownfield FDI. This has led to a significant fall in
CODELCO’s share of national copper output. In 1990, CODELCO represented around 75% of the
Chilean copper output, while nowadays it contributes just 30% (COCHILCO, 2019). As a result, the
most strategic decisions about the organisation and coordination of the copper GPN are not taken in
Chile, but in the headquarters of mining MNEs and in London, where copper is priced and traded. As
has been understood for some time, such external control weakens the agency of the resource periph-
eries to capture value and mining MNEs’ embeddedness with those territories (Phelps et al., 2003).
Chile also plays a secondary role in the mining service supplies industry. The organisation of min-
ing in Chile has increasingly shifted to one in which more than two-thirds of mining services were
outsourced by 2010 (Atienza et al., 2018; SERNAGEOMIN, 2016). Despite a significant increase in
the number of the Chilean mining service suppliers and state and private efforts to promote “world
ATIENZA et al.   
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class suppliers,” it is now widely acknowledged that these efforts have failed to generate large numbers
of internationally competitive suppliers that are integrated into GPN (Gobierno de Chile, 2014; Urzúa,
2012). These policies were based on the idea of promoting clusters around the main production sites
but have been heavily criticised due to the lack of support from mining MNEs to small and medium
enterprises (SMEs) suppliers in resource peripheries.
The handful of Chilean local suppliers able to become strategic suppliers and global competitors,
starkly contrast with other extractive countries, such as Australia and Canada, where this industry
has significantly increased its contribution to mining innovation and national exports. In this regard,
Atienza et al. (2018) show that, around two-thirds of the top 30 CODELCO’s operational services
suppliers, were foreign firms. These also represented more than 30% of the total operational services
supplied to this company between 2012 and 2014. In a similar (and troubling) way, service suppliers
MNE’s subsidiaries located in Chile represented around half of the total services provided to mining
multinationals in 2013, according to the SICEP database. Particularly relevant in the development of
the mining industry in Chile and its services suppliers industry is its spatial organisation, since some
authors have pointed out the existence of extractive enclaves, where most of the economic linkages
are developed with large mining MNE suppliers instead of local ones (Arias et  al.,  2014; Phelps
et al., 2015).

4.2  |  Gateway and backdoor cities in the Chilean copper GPN

The Chilean urban system is one of the most concentrated in Latin America, due especially to its
centralist state model and its rapid urbanisation process between the 1930s and the 1970s (Aroca &
Atienza, 2016; Atienza & Aroca, 2012), which gave birth to an extreme degree of national concen-
tration of population and economic activity (OECD, 2018). In 2016, the Metropolitan Region (Gran
Santiago) represented around 35% of the national population and 47% of the national GDP (Aroca &
Atienza, 2016). In this context, the understanding of economic, knowledge, political, and decision-
making power concentrated in Santiago is crucial for assessing the role played by Chilean urban ag-
glomerations as nodes of the copper GPN. The phrase “Santiago is Chile,” heard all over the country,
encapsulates and naturalises this extreme concentration.
Gran Santiago stands out as the main and almost only gateway city of the copper GPN in Chile at
least in four out of the five functions proposed by Scholvin et al. (2019): corporate control, service
provision, logistics, and transport and knowledge generation. The location of the function of industrial
processing is determined by the nature of the extractive activity and takes place in the mining periph-
ery, since copper is smelted and refined where the deposits are located. Nevertheless, as previously
mentioned, this function has lost relevance in Chile during the last three decades due to the progres-
sive reduction in copper smelting and refining.

4.2.1  |  Corporate control

In terms of corporate control, the central role of Gran Santiago as the gateway of copper production
for the rest of the country is evident. The headquarters of all the most relevant mining companies are
located in Gran Santiago. Here, these companies have access to direct contact with the main public
organisations related to the mining industry. This situation is manifest when we consider mining taxa-
tion. Gran Santiago registered around 70% of the total sales declared to the Chilean Internal Revenue
System (SII) by the mining industry, while it produced less than 5% of national output between 2005
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10       ATIENZA et al.

and 2014 (Aroca & Atienza, 2016). The case of the public company CODELCO is an extreme exam-
ple of corporate control located in Gran Santiago given its status as “national champion” and chief
revenue provider to the Chilean state.

4.2.2  |  Service provision

A similar spatial pattern is found in service provision. Gran Santiago serves as the main urban node
for mining services provision. In general terms, Gran Santiago has historically been, on the one hand,
an importer of services and inputs from the rest of the world; and on the other hand, a services and
inputs exporter to the national hinterlands (Aroca & Atienza, 2016). This pattern is also found in the
case of mining services. According to SICEP, Gran Santiago concentrates 56% of the headquarters of
mining services supplier firms and more than 80% of sales to mining companies. In contrast, the main
mining city of the country, Antofagasta, only represents 25% of the headquarters of mining services
suppliers, predominantly SMEs, while the participation of other mining cities is less than 5% each.
This situation is even more extreme for large strategic suppliers. According to the SICEP database,
almost 90% of the headquarters of large and multinational supplier firms are based in Santiago.

4.2.3  |  Knowledge creation

Historically, Gran Santiago has been the main urban agglomeration of Chile in terms of knowledge
creation in general and in mining. The most important universities and research centres of the coun-
try are located in the capital city, which also attracts the most qualified workers from other regions/
countries and has developed an entrepreneurial ecosystem that favours knowledge transfer (Aroca
& Atienza, 2016; Atienza et al., 2016). This degree of knowledge concentration can be observed in
the number of mining patents applied for by firms and individuals to the Chilean National Institute
of Industrial Property (INAPI). Between 2000 and 2009, Gran Santiago represented 76% of total
applications, while the figure for mining regions was less than 15% (Atienza et al., 2015). Between
2007 and 2014, most total innovation-related expenditure took place in Gran Santiago (Aroca &
Atienza, 2016).

4.2.4  |  Logistics and transport

Concerning logistics and transport connections, Gran Santiago is exceptionally well connected to a
dense network of highways to the main national port, located in the neighbouring city of Valparaíso;
while also hosting the main Chilean airport, which represented 47% of domestic passengers and 98%
of international passengers in 2016 (Chilean Ministry of Transport and Telecommunication data).
It is essential to remark that, the most relevant flows of passengers in domestic flights (around 41%
of the total domestic passengers), connect Santiago with three of the main Chilean mining cities:
Antofagasta, Calama, and Iquique, each of which is more than 1,000 kilometres far away from the
capital.
These last figures are strongly related to the fly–in fly–out system of work (FIFO) in the extractive
industry, which suggests a disarticulated regional economy (Martinus, 2016, 2018; Stilwell, 1991).
As MacKinnon (2013) explains, the FIFO reflects a second form of economic leakage: the first one
being the profits captured by the mining firms, and the second caused by the “fly over” effect of
ATIENZA et al.   
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   11

long-distance commuting, where value is significantly captured in the regions where workers live.
Despite the relevance of Gran Santiago in the connection of Chile with the rest of the world, it is im-
portant to consider the role of the city of Antofagasta as the main hub for copper exports and mining
inputs imports. Its location, close to the largest copper deposits in the world, makes Antofagasta’s port
a natural logistic hub in the copper GPN.
These results corroborate the role of Gran Santiago as the gateway city, which can play the role
of connecting the peripheral mining areas with the copperGPN, while the main mining city of the
country, Antofagasta, acts as a backdoor city that is globally connected but mainly as a logistic hub
and supplier of generic services,3 while the other mining cities have a very marginal position in the
gateway city functions and remain as highly disconnected resource peripheries. In the next section, we
analyse what are the filtering mechanisms that are acting in Chile to understand the extent to the main
“gateway city” of the Chilean copper GPN is a “hinge” between the resource peripheries and global
networks or if it filters growth impulses in ways that preclude virtuous forms of economic develop-
ment in resource peripheries.

4.3  |  Filtering mechanisms

In this section, we analyse the three mechanisms identified by according to Breul et al. (2019) that
can be filtering the opportunities for Chilean resource peripheries being virtuously integrated into the
copper GPN to the benefit of the gateway city of Santiago (Table 1).

4.3.1  |  Regional assets

During the early 1940s to the 1970s, Chile experienced a rapid process of urbanisation and Gran
Santiago started a path of asset accumulation that peaked during the 1990s. Many studies have re-
ported the disproportionate development of urbanisation economies in Gran Santiago and the lack of
localisation economies in peripheral regions (Aroca & Atienza, 2016; Brülhart & Sbergami, 2009;
Geisse & Valdivia, 1978; Henderson, 2003).

T A B L E 1   Filtering mechanisms at work in the Chilean copper GPN

Regional assets • Agglomeration economies (market size effects)

• Labour sorting
• Infrastructure
• Universities and research centres
• Access to economic and political power
Institutional filtering • Centralised state
• Lack of political and fiscal decentralisation
• Limited public expenditure
• Spatially blind policies (Ex. Cluster policies and mining services
suppliers development programmes)
Corporate filtering • Centralisation of corporate activities (headquarters of mining
companies and mining services supplier)
• Long-distance commuting (FIFO, shift work systems)
• National scope of public mining companies (CODELCO)
Source: Authors.
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12       ATIENZA et al.

Gran Santiago has many regional assets that facilitate the development of enterprises including
infrastructure, universities, research centres, a mature entrepreneurial ecosystem, urban amenities,
and the presence of public and private organisations that might provide financial, managerial and
technological support. Market size effects, access to a more qualified labour market, and innovative
firms together with the proximity to political power and the main public organisations related to the
mining industry, makes Gran Santiago a more attractive location for the headquarters of mining com-
panies and large mining service suppliers and acts as a filter on these firms (re)locating in the Chilean
resources periphery.
The availability of strategic assets in Gran Santiago is complemented with the lack of such assets in
mining regions where urban agglomerations lack scale and are extremely dependent on the extractive
activity and, therefore, subject to the high instability of boom-bust cycles, including the backdoor city
of Antofagasta. Furthermore, these extractive hinterlands are characterised by high costs of living,
lack of land for business development, negative externalities related to the mining activities, weak
connectivity, and a small stock of labour force (Arias-Loyola & Vergara-Perucich, 2020; Atienza
et al., 2020). This situation has deep historical roots and is partially explained by the second filtering
mechanism proposed by Breul and Revilla Díez (2019) focused on the role of institutions.

4.3.2  |  Institutional filtering

Since the Constitution of Portales in 1833, the first after the independence of the country, the ex-
tremely centralised institutional framework of Chile has tended to maintain historical patterns
of location and led to urban primacy indexes that are amongst the highest in the world (Aroca &
Atienza, 2016). The current regionalisation of the country was centrally imposed by the Pinochet’s
dictatorship (Boisier,  2000) and regional administrators (intendentes) are still appointed by the
President, and the degree of administrative, political and fiscal decentralisation is amongst the low-
est in Latin America, limiting the possibility of designing bottom-up regional development strategies
(OECD, 2017; Valenzuela et al., 2019). The combination of a neoliberal economic model, that limits
public intervention, and a centralist model of political, fiscal, and administrative administration places
Chile in a unique situation compared to other OECD and Latin American countries, with a very weak
total public expenditure (as a percentage of GDP) as well as a low level of subnational spending (as
a percentage of total public expenditure) (Irarrazabal & Rodríguez, 2018; OECD, 2017; Ruano de la
Fuente & Vial Cossani, 2016).
The effect of this institutional framework on the spatial organisation of mining-related activities is
to limit the emergence of place-based policies and endogenous processes of mining-based economic
development at a local level; benefiting the “gateway city” to the detriment of resources peripheries.
This is particularly evident in the case of the Chilean mining development strategy, where, according
to Bravo-Ortega and Muñoz (2018), most of the national mining programmes disregard the regional
perspective.
One illustrative example is the evolution of the mining cluster policy. Proposed at the beginning
of this century as a local initiative to promote backward linkages between local suppliers and mining
companies in the cities of Calama and Antofagasta, it rapidly became in 2007 part of a national policy
to increase Chilean competitiveness, later evolving to a “national cluster policy” (Atienza et al., 2016).
In this context, the “Cluster Program, World Class Suppliers”, initiated by BHP Billiton in 2009 and
rapidly followed by CODELCO and other mining companies, was created to build technological ca-
pabilities amongst Chilean mining suppliers.
ATIENZA et al.   
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The programme aimed to transfer knowledge from mining companies to services suppliers through
the development of innovative solutions to a variety of problems. It was designed from a national
perspective without any consideration of spatial variations. Being “spatially blind,” the programme
reproduced, reinforced even, existing spatial inequalities between the “gateway city” region and pe-
ripheral mining regions. In fact, close to 80% of the mining suppliers participating in this programme
belong to Gran Santiago, where technological capabilities were already most developed. A similar
institutional pattern is found in the recently adopted a mining development strategy that aims to trans-
form the Chilean mining industry into an “innovative, sustainable and inclusive” activity (Gobierno
de Chile, 2014), which is also flawed in its national perspective design.

4.3.3  |  Corporate filtering process

Two corporate practices of mining companies have acted to reduce Gran Santiago's role as a gateway
for mining hinterlands in Chile. The first is that the vertical disintegration of production has been
accompanied by the centralisation of corporate activities (Parker & Cox, 2018). Mining companies’
headquarters in Chile do not need to be located close to the deposits to get the best of both worlds:
strategic assets and global market access in the “gateway city” and natural resources in the mining
cities. This form of organisation promotes the co-location of strategic and more specialised mining
services suppliers’ headquarters in the gateway city and limits the role of the mining cities, including
Antofagasta, to providers of generic services requiring spatial proximity in a way where they resemble
backdoors to development instead.
The second corporate practice that filters on the potential role of Gran Santiago as a gateway to
the copper GPN is the increasing use of long-distance commuting in the organisation of the labour
force, even in the case of mining cities with relatively larger labour markets, such as Antofagasta. It
is difficult to know whether this is a response to the lack of labour in mining areas, reflects strategies
to reduce costs and atomise traditionally powerful mining unions, or derives from the preferences of
mining workers of living in places with better amenities. The fact is, in any case, that mining periph-
eries are losing one of the main local assets for economic development, a problem that may increase
with the increasing technological development of remote work in mining sites.
The case of CODELCO as a Chilean public company and the world leader in copper production
deserves special examination. Here the combination of both institutional and corporate filtering mech-
anisms come together in shaping how the copper mining GPN touches down in Chile. CODELCO has
seven mining divisions located in different territories across northern and central Chile. Its corporate
strategy is centrally designed in Gran Santiago as the company is considered a national strategic asset.
In this sense, the mission of CODELCO is corporately and institutionally defined as a national one.
This definition makes CODELCO a company that, in many cases, is less connected to resources pe-
ripheries than mining MNEs where a “liability of foreignness” and the necessity of gaining a social
licence to operate drive a measure of local presence in extractive regions.
These three types of filtering mechanisms working in the Chilean copper GPN benefit Santiago
as a gateway city to the detriment of resources peripheries, reducing their opportunities for achieving
strategic coupling and value capture. The effect of these mechanisms is particularly evident in the
territorial embeddedness of mining activity across the different urban nodes, considered as one of the
main inputs for achieving economic development (Coe et al., 2004; Coe & Yeung, 2015).
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14       ATIENZA et al.

4.4  |  Territorial embeddedness in the Chilean copper mining GPN

Territorial embeddedness reflects the anchoring of firms in a region or city in terms of their depend-
ence on local resources, labour force, and service suppliers amongst other factors (Coe et al., 2004;
Henderson et  al.,  2002; Hess,  2004). Drawing on indicators from Kleibert (2015) and Atienza
et al. (2018), this section evaluates the extent to which copper mining is territorially embedded across
the Chilean urban hierarchy as a condition for successful local development and relates it to the fil-
tering mechanisms at work. As a proxy of the different dimensions of territorial embeddedness, we
consider the following elements: fixed investment made by mining companies; productive linkages;
presence of indigenous firms in mining cities; and the degree of complexity and sophistication of the
functions performed by the different urban nodes. As previously mentioned, we add another compo-
nent that is particularly relevant in the case of the mining industry, labour embeddedness, considering
the prevalence of FIFO arrangements.

4.4.1  |  Fixed investment

Mining companies are naturally embedded in the territories where minerals are located due to the
fixity of deposits. Exploring deposits and developing a mine take a long period of time, between five
and fifteen years, before being ready for exploitation. During this time, there is a massive amount of
fixed investment. Furthermore, deposits in Chile tend to have a long life (20 or more years), where
the usual practice is that its life cycle is extended by brownfield investments (Comisión Nacional de
Productividad, 2017). It is difficult to calculate each mine fixed investment across its life cycle but a
proxy of its relevance is the size of mining FDI under Decree-Law 600, which between 2006 and 2015
represented almost a third of total FDI in Chile (COCHILCO, 2019). This kind of natural territorial
embeddedness is not a guarantee of positive development outcomes for the cities and communities
located in the proximity of deposits that could become just temporary places of mineral extraction as
old abandoned nitrate company towns in northern Chile testify.

4.4.2  |  Productive linkages

One of the most used proxies of territorial embeddedness is the strength of productive linkages. In
this respect has been argued that the processes of vertical disintegration in mining production since
the early 1990s might foster the development of productive linkages (Morris et al., 2012). However,
this result has not been found in Chile. Castaño et al. (2019) found that, at a national level, mining
backward and forward linkages have systematically diminished during the copper prices super-cycle.
Furthermore, it is important to consider that the potential increase in mining productive linkages can-
not be evenly distributed across space due to the differences in absorptive capacity and to the spatial
divisions of labour across the urban system.
In fact, the main mining areas are the territories that experienced de highest declines in backward
mining productive linkages during the super-cycle (Atienza et al., 2018). This is a result of mining
companies taking advantage of high prices by increasing the use of installed capacity to maximise out-
put but also a consequence of the previously mentioned filtering mechanisms that lead most strategic
and specialised suppliers not to be located in mining cities but in Gran Santiago.
ATIENZA et al.   
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   15

4.4.3  |  Presence of indigenous firms in the mining industry

The predominance of Santiago is not only in terms of mining companies and mining service suppli-
ers, but also in the presence of local firms attached to the territory. In many Chilean mining cities,
the embeddedness of mining companies is limited to the subsidiaries’ corporate social responsibility
(CSR) units or foundations, such as in the case of CODELCO in the city of Calama or BHP Billiton
in the city of Antofagasta. In the case of mining service suppliers, Gran Santiago concentrates 56% of
the headquarters of mining services supplier firms (around 2,000), while the mining cities of major
importance, according to the number of headquarters installed in the city, are Antofagasta (with 854
companies), and Iquique (with 201).
The remaining mining cities have a considerably smaller number of indigenous supplier compa-
nies—typically fewer than one hundred. Even Calama, one of the main copper mining cities in the
country and worldwide, hosts only 89 suppliers’ headquarters (Table  2). One shared characteristic
amongst all mining cities, except Antofagasta, is mining services suppliers branches largely outnum-
bering the presence of headquarters, implying low levels of territorial embeddedness of the mining
GPN in the extractive territories. This is especially conspicuous for the city of Calama, where the
number of subsidiaries more than doubles the locally based headquarters (Table 2).
Likewise, there are also significant differences between mining cities and Gran Santiago in terms
of the size of the headquarters of mining supplier firms. Both, Antofagasta and Iquique, cities with
a large number of supplier companies, stand out as also having a low percentage of large companies
(Table  3). This result could be associated with these regions’ greater dynamism in the creation of
companies, but also with the higher mortality rate of companies documented, amongst others, by
Benavente (2008).
Moreover, the cities of Calama, Copiapó and, especially, Rancagua are characterised by a greater
presence of large supplier firms. Nonetheless, Gran Santiago is still the national leader, since large
mining supplier firms represent 46% of its local firms. This starkly contrasts with 13.5% of such firms
located in the city of Antofagasta (Table 3). In fact, near 90% of the large mining service suppliers’
headquarters are located in Gran Santiago (Atienza et  al.,  2018). Furthermore, the spatial location
of mining service suppliers is based on their high dependency on the mining companies, since the

T A B L E 2   Mining services supplier headquarters and branches per city

Number of Subsidiaries/
City headquarters % Subsidiaries % Total % Headquarters
Antofagasta 854 24.7% 585 34.4% 1.439 27.9% 0.7
Calama 89 2.6% 168 9.9% 257 5.0% 1.9
Copiapó 50 1.4% 130 7.6% 180 3.5% 2.6
Coquimbo-Serena 93 2.7% 90 5.3% 183 3.5% 1
Iquique 201 5.8% 159 9.3% 360 7.0% 0.8
Rancagua 26 0.8% 31 1.8% 57 1.1% 1.2
Gran Valparaíso 133 3.8% 91 5.3% 224 4.3% 0.7
Gran Concepción 76 2.2% 148 8.7% 224 4.3% 1.9
Gran Santiago 1,938 56.0% 299 17.6% 2.237 43.3% 0.2
Total 3,460 100% 1,701 100% 5.161 100% 0.5
Source: Authors based on SICEP.
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16       ATIENZA et al.

T A B L E 3   Size of services supplier per city (headquarters)

Cities Micro Small Medium Large

Antofagasta 13.9% 44.9% 27.7% 13.5%
Calama 9.5% 36.9% 23.8% 29.8%
Copiapó 6.7% 26.7% 31.1% 35.6%
Coquimbo-Serena 11.9% 34.5% 27.4% 26.2%
Iquique 11.0% 47.3% 28.0% 13.7%
Rancagua 4.2% 29.2% 20.8% 45.8%
Gran Valparaíso 7.8% 31.0% 31.0% 30.2%
Gran Concepción 8.2% 35.6% 30.1% 26.0%
Gran Santiago 6.7% 20.4% 26.8% 46.0%
Source: Authors based on SICEP.

T A B L E 4   Origin and internationalisation of mining service suppliers per city

Chilean
Foreign multinational multinational
Cities Chilean Supplier supplier supplier
Antofagasta 822 96.3% 26 3.0% 6 0.7%
Calama 88 98.9% 0 0.0% 1 1.1%
Copiapó 48 96.0% 2 4.0% 0 0.0%
Coquimbo-Serena 89 95.7% 4 4.3% 0 0.0%
Iquique 200 99.5% 1 0.5% 0 0.0%
Rancagua 26 100.0% 0 0.0% 0 0.0%
Gran Valparaíso 113 85.0% 13 9.8% 7 5.3%
Gran Concepción 74 97.4% 1 1.3% 1 1.3%
Gran Santiago 1,366 70.5% 439 22.7% 133 6.9%
Other cities 327 93.2% 16 4.6% 8 2.3%
Total 3,153 82.7% 502 13.2% 156 4.1%
Source: Authors based on SICEP.

suppliers sell—on average—more than 80% of their products to the mining companies, largely con-
centrated in the Metropolitan Region (based on data from the SICEP).
One of the distinguishing features of the service suppliers’ productive activity across mining cities is
the absence of headquarters of multinational suppliers located there. In smaller mining cities, the pres-
ence of these kinds of firms is almost nil, especially for MNE suppliers of Chilean origin (Table 4).
Only Antofagasta presents a greater number of MNE headquarters, though only six of these are of
local origin. This is the opposite of the case in both Gran Valparaíso, the main port of the country,
where 15% of the suppliers are MNEs, and in Gran Santiago where the figure is 30% (Table 5). In fact,
87% of all MNE services suppliers are located in the capital city. When considering that MNE suppli-
ers have a greater opportunity than domestic suppliers to connect to international centres of technol-
ogy and innovation, the role of Santiago as a “gateway city” is reinforced, improving its development
prospects at the expense of the extractive regions.
T A B L E 5   Functional specialisation of Chilean cities in mining services. (LQ)

Coquimbo Gran Gran Gran

Actividades Antofagasta Calama Copiapó Serena Iquique Rancagua Valparaíso Concepción Santiago Others
ATIENZA et al.

***
Fuel, Energy & Strategic 0.7 0.6 0.3 1.0 0.9 1.1 0.9 0.7 1.2 0.7
Supplies
Construction (major 1.0 1.2 0.9 1.1 1.3*** 1.2 0.7 1.5 0.9 1.2***
projects)
Construction (minor 1.3*** 1.6*** 0.8 1.3 1.7*** 1.3 0.9 0.8 0.7 1.4
projects)
Electrical Equipment & 0.6 0.4 0.2 0.3 0.7 1.0 1.3 1.1 1.3*** 0.6
instrumentation
Exploration 0.5 0.6 1.3 2.2*** 0.3 2.6 1.2 0.9 1.3*** 0.6
Maintenance and repair 1.3*** 1.4*** 1.4 0.9 1.3*** 1.2 1.0 1.2 0.8 1.1
Mining Operations 0.8 0.8 1.4 1.7*** 0.7 1.2 0.9 0.3 1.1*** 1.1
***
Generic support services 1.2 1.0 1.2 1.1 1.0 0.5 0.9 0.7 1.0 0.7
Plant process 1.1 0.9 0.9 0.9 1.0 1.0 0.8 1.2 0.9 1.3***
Industrial safety 1.0 0.4 0.0 1.0 1.4 0.5 0.4 0.0 1.1 0.9
Environmental services 0.6 0.5 1.6 0.2 0.3 0.4 1.7 1.3 1.3*** 0.6
*** *** ***
Renting services 1.4 1.8 2.4 1.6 1.3 1.1 0.6 1.0 0.6 1.4***
Information technology 0.7 0.3 0.2 0.7 0.6 0.8 1.1 0.8 1.4*** 0.4
services
Engineering and 0.8 0.6 0.4 0.5 0.8 1.0 1.1 1.1 1.2*** 0.7
professional services
Transport 1.0 2.2*** 2.3*** 0.9 1.2 0.6 1.3 1.4 0.7 1.9***
*** ***
Sales 0.7 0.3 0.0 0.7 1.1 0.9 3.5 2.1 1.0 0.8
***95% Confidence interval.
  
|   17
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18       ATIENZA et al.

4.4.4  |  Complexity and sophistication of functions

In terms of the degree of complexity and sophistication of the services supplied by the different
urban nodes, our analysis reproduces the spatial divisions of labour observed at a regional level by-
Atienza et  al.  (2018). The cities of Antofagasta, Calama, Iquique, and Copiapó display high and
significant specialisation in less intensive knowledge activities such as minor construction, mainte-
nance, and repair projects, general services, leasing, and transportation (Table 5). The only exception
is the Serena-Coquimbo conurbation, specialised in exploration and mining operations. This differ-
entiates the conurbation's productive fabric which, despite its small size, has a greater presence of
knowledge-intensive activities. In contrast, Gran Santiago specialises in hosting the most technology
and knowledge-intensive activities, while Gran Valparaíso and Gran Concepción stand out for their
specialisation in sales (Table 5).4 This pattern of spatial divisions of labour reduces the dependence of
mining companies on generic service suppliers from the resource periphery, limiting their territorial
embeddedness.

4.4.5  |  Labour embeddedness

Finally, it is important to consider changes in local labour markets as a phenomenon of particular

interest in the analysis of territorial embeddedness of the extractive industry in Chilean mining cit-
ies. Mining workers traditionally lived in mining settlements creating strong social bonds, place, and
class identities (Arias et al., 2014; Garcés, 1999; Rodrigo-Benito, 2010). However, the development
of long-distance commuting associated with FIFO since the 1990s (Atienza & Aroca, 2012) is under-
mining social reproduction, camaraderie, and union power in these areas (Phelps et al., 2015). Long-
distance commuting is particularly prevalent in cities where large scale mining industry predominates,
such as Antofagasta and Calama. According to the National Employment Survey, more than half of
the labour force working in the mining industry did not live in the two cities in 2019.
The results of this section show that previously mentioned filtering mechanisms are leading to a
pattern of weak territorial embeddedness of mining firms, labour, and activity in resources periphery,
even in the case of Antofagasta, that despite playing some functions of gateway cities, it is also char-
acterised by decreasing productive linkages, a small share of sales to the mining companies, relatively
reduced number of indigenous firms, a strong specialisation in routine and ancillary services and the
loss of a significant share of mining working force because of FIFO, ratifying the role of Antofagasta
as a backdoor city. From this perspective, most of the Chilean mining periphery continues to suffer—
in modified form—from many of the traits of extractive enclaves and present discouraging prospects
of sustainable development.

5  |   CO NC LUSION S
The analysis of the role played by the different urban nodes in the Chilean copper GPN suggests that
historical trends of the extreme concentration of population, output, and strategic functions in Gran
Santiago are being reproduced. Despite the paramount importance of Chile in copper production
worldwide, Gran Santiago plays merely a secondary role in the GPN. What value does not leave Chile
is mainly captured by Gran Santiago which, as the gateway city of Chile plugged into the copper GPN
in respect to four out of its five functions (corporate control, service provision, logistic and transport
and knowledge generation), tends to filter out economic development opportunities further down the
ATIENZA et al.   
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   19

urban hierarchy in extractive regions. We find that this metropolitan area is the only one achieving
some degree of territorial embeddedness of mining activities.
In contrast, in the Chilean mining territories, only the city of Antofagasta stands out in terms of its
role as a logistic and transport node, basically as a raw material exporter. While it cannot be consid-
ered a gateway city, it might be considered what we label a backdoor city—one which articulates one
of the largest copper resource peripheries worldwide to the national urban system and its gateway city
Santiago. The city of Antofagasta illustrates this kind of intermediate category of the urban node in the
copper GPN—one which has one or some functions of gateway cities but which, due to its inability to
promote territorial embeddedness and value capture sufficient for sustainable development—ends up
as an example of a modified extractive enclave in contrast from the remaining smaller mining cities
that resemble more traditional enclaves.
Despite the almost total absence of mineral deposits, filtering mechanisms strongly embed the
mining and mining-related industries in Gran Santiago, particularly in terms of MNEs’ headquarters
location and the specialisation in the provision of knowledge-intensive and more sophisticated ser-
vices. In contrast, the territorial embeddedness of mining activity in extractive territories is very weak.
Despite the large fixed investments that mining production implies, almost all mining cities except
Antofagasta and Iquique are dominated by branch plants and in most cases by SMEs which tend to be
specialised in ancillary and routine services provision.
Furthermore, despite vertical disintegration in the copper mining industry, backward and forward
productive linkages have starkly decreased in these territories during the last two decades. These
results reveal that the gateway city of Santiago is not properly connecting the Chilean resource periph-
ery to the GPN. In contrast, many filtering mechanisms are at work leading to unsustainable forms
of development in mining cities prone to elements of decoupling if mineral prices and the quality of
deposits diminish; something that is reminiscent of the collapse of the nitrate-era enclaves that left
dozens of ghost towns in Chile.
This paper advances urban-economic theory when pointing to the need to consider the existence
and the diversity of intermediate categories of cities across urban systems (Phelps, 2017)—including
those urban systems that incorporate resource peripheries woven into GPN. Specifically, the paper
extends the literature on gateway cities connecting it with the concept of territorial embeddedness
from the GPN framework as a way to evaluate the consequences of the filtering mechanisms at work.
While some cities, like Antofagasta, are part of the global networks and perform some of the
functions of gateway cities, they are not able to plug the resource periphery with the GPN due to the
lack of territorial embeddedness. These backdoor cities might become gateway cities in the long term,
although the filtering processes identified by Breul et al. (2019) seem to imply strong path dependen-
cies within urban systems. A parallel elaboration of those processes whereby development impulses
are relayed down the urban hierarchy would be important, not least since these imply path-breaking
opportunities for extractive regions. Future research lines should address this point and some of the
limitations of this research. In a particular research that combines quantitative with qualitative re-
search would allow a better understanding of the process of territorial embeddedness and the specific
filtering mechanisms at work.

CONFLICT OF INTEREST
No conflict of interest.

DATA AVAILABILIT Y STATEMENT

Research data are not shared.
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20       ATIENZA et al.

ORCID
Miguel Atienza  https://orcid.org/0000-0003-3202-574X
Martín Arias-Loyola  https://orcid.org/0000-0001-8740-6326

ENDNOTES
1 Acronym for “Sistema de Calificación de Empresas Proveedoras” in Spanish. SICEP is a supplier platform that
belongs to the Antofagasta Industrial Association (AIA) whose aim is “to contribute to the strengthening of produc-
tion chains of the domestic mining industry, constituting a contact point between buyers and suppliers of goods and
services in the domestic mining market” (www.aia.cl).
2 It is important to consider that this decision leaves out of our analysis some municipalities of smaller size and where
almost all activity is mineral extraction and which could be considered the lowest end of the hierarchy of places of the
mining GPN.
3 The case of Antofagasta contrasts with the case of a mining gateway city like Perth in Australia (Martinus, 2018) that
has been able to become the site of the headquarters of competitive mining services suppliers and corporations and
plays an increasing role in the creation of knowledge and mining technology.
4 The level of significance in this table estimates whether the location quotient (LQ) is statistically different from the
value 1 (non-specialization) with a 95% confidence interval using the test proposed by Moineddim et al. (2003).

R E F E R E NC E S
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How to cite this article: Atienza M, Arias-Loyola M, Phelps N. Gateways or backdoors to

development? Filtering mechanisms and territorial embeddedness in the Chilean copper
GPN’s urban system. Growth and Change. 2020;00:1–23. https://doi.org/10.1111/grow.12447