Productive Diversification and Sustainable Regional Development in Resource-Dependent Regions: Tourism Performance, Regional Institutional Capacity and Structural Constraints in Chile

Productive diversification is a central condition for sustainable regional development, particularly in resource-dependent territories where dominant sectoral structures may limit adaptive capacity, territorial resilience, and long-term structural transformation. Although tourism is frequently promoted as a potential pathway for regional diversification, its contribution should not be assumed to be direct, homogeneous, or automatic. This study examines the association between tourism performance, regional budgetary-institutional capacity, dominant economic structure, and productive diversification across Chilean regions during the period 2015–2025. Using an exploratory regional panel data approach, productive diversification is measured through a normalized sectoral entropy index, while tourism performance and regional budgetary-institutional capacity are approximated through proxy-based indicators constructed from publicly available official data. The empirical strategy applies a two-way fixed-effects model with region and year effects and heteroskedasticity-consistent HC3 robust standard errors. The results show that dominant economic structure is negatively and statistically significantly associated with productive diversification, indicating that a higher concentration of regional output in a dominant activity constrains diversification processes. By contrast, tourism performance, regional budgetary-institutional capacity, and their interaction do not show statistically robust associations once regional and temporal heterogeneity are controlled for. These findings challenge the view of tourism as an autonomous driver of structural transformation and suggest that tourism promotion alone may be insufficient to alter deeply rooted patterns of productive concentration. The study contributes to the literature on sustainable regional development by shifting the discussion from tourism-led growth toward the structural and institutional conditions under which tourism may—or may not—support productive diversification in resource-dependent economies.