Study of economic imbalances in Ecuador through exploratory analysis of spatial data and spatial convergence models

The results of the research project "Economic and social disparities at the provincial level in Ecuador, change of the productive matrix and territorial convergence processes" (XIII Diuc Research Contest), executed by the Research Group in Regional Economics (GIER) accounts for marked subnational economic imbalances in Ecuador, characterized by a heterogeneous economic and social geography. Likewise, using traditional transverse economic methodology, it is found that the cantonal convergence in Ecuador slows down due to an invariable territorial productive matrix and other local structural variables. Although the expected results are plausible, however the suspicion of an important presence of spatial autocorrelation in Ecuador arises. The same, for the levels of subnational productivity, means that the economic development of an area is related to that of nearby areas, which would have two relevant implications. On the one hand, it is possible that much of the explanation of the development of some territories and the delay of others, may be due to the role of the space "productivity spillovers, associated with various sources, whose study, in addition to being a pioneer in Ecuador, could give new lights on the territorial productive development policy. On the other hand, if it is corroborated that territorial economic performance correlates with its relative location in space, we would be facing the case of space clusters (spatial dependence) that causes traditional territorial economic convergence models to grant biased and inefficient estimators, which is solved with spatial economic regressions. Therefore, the present study seeks to resolve the issue of the existence of spatial autocorrelation in the levels and rates of productivity growth at the cantonal scale in Ecuador; As well as determining the existence of absolute and conditional economic convergence clubs. Achieved a double purpose: to obtain reliable results, and introduce the role of space in the study of local economic development in Ecuador; Which cannot be ignored when designing policies with endogenous development approach.

14th RESEARCH PROJECT COMPETITION