Firm Creation, Firm Evolution and Clusters in Chile’s Dynamic Wine Sector: Evidence from the Colchagua and Casablanca Regions

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Then we look at the times in which these businesses were created. There are twenty firms
with dates. A large number (8) were created in the late nineteenth century - Concha y
Toro, San Pedro, Santa Rita, Santa Carolina, Errazuriz, Undurraga, Tarapaca and
Carmen. And then another 10 were created between 1976 and 1998 - Cono Sur, Montes,
Via, Ventisquero, Los Vascos, Vinedos Emiliana, Luis Felipe Edwards, Montgras, Casa
Lapostolle and Corpora. In other words virtually half of the companies come from the
nineteenth century and the other half from the export boom of the late twentieth century
(see Table Three).

It is important to address how the portfolio of Chilean firms today came into being. There
were certainly significant gaps between the shift to neoliberal policy of the military
government in the 1970s and the arrival of an outward-oriented sector. In the 1980s
Gwynne (2006) argues that this change was due to the ever increasing debt burden of
Latin American countries. It may also be due to the fact that more financial support was
offered to countries entering this economic phase supported by the International
Monetary Fund and the World Bank (Gereffi et al, 2005).

One of the major factors contributing to this decline was the economic crisis of 1982-3.
The Chilean economy declined by 14% as the Chilean currency became seriously over-
valued, over-production occurred, and a slump in the economy (Gwynne, 2006).
Furthermore, the opening of the Chilean market to global forces proved too much
competition for the companies used to producing for the small domestic market (Chile’s
population was only 11 million in 1982). Middleton (2008) says the global market proved
too competitive for these companies and less state subsidies also meant some firms could

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