The recent expansion of global demand for natural resources has created
a production boom in countries endowed with natural resources.
Increasing global trade and investment - globalization - offer an
important opportunity for developing countries as the global flow of
commodities often accompany knowledge and information to increase
productivity to facilitate economic development. This positive feature
of globalization has some serious drawbacks when the country is not
equipped with an institution to ensure environmental sustainability.
This paper sought to demonstrate this through the examination of the
Chilean salmon farming case. The Chilean salmon farming industry has
grown dramatically since the mid 1980s to become the number two exporter
of farmed salmon in the world after Norway. The sector, however,
suffered a decline in production volume due to the sanitary crisis in
2007. The case also tries to capture the on-going efforts made by the
government to strengthen the institution to prevent further occurrences
of environmental and sanitary crises.
Keywords: Globalization, Environmental sustainability, Institution, Innovation, Chile
JEL CODES: Q 56 O20 O54