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Productivity determinants in the construction sector in emerging country: New evidence from Ecuadorian firms

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  • Segundo Camino‐Mogro
  • Natalia Bermudez‐Barrezueta

Abstract

The construction sector is one of the most important sectors for economic development due, among other reasons, to the productive chains that it generates. This paper presents an analysis of the determinants of the total factor productivity (TFP) in the Ecuadorian construction sector during the period 2007–2018. In the first stage, we estimate a production function using the Wooldridge (Economics Letters, 2009, 104, 112–114) estimator to correct the simultaneous determination of inputs and firm unobserved productivity. In the second stage, we analyze the main determinants of TFP. These determinants are classified into four groups: internal, international trade, financial constraints, and external characteristics. Our results suggest that firm age is positively related with TFP but negatively related with TFP growth. Similarly, the fact of being a family firm is negatively related with TFP, but size is positively related with TFP and its growth across the construction subsectors. In addition, we find that access to debt and credit is positively related with productivity, but less‐competitive environment is negatively related with productivity. Finally, our results suggest that TFP and its growth are pro‐cyclical with respect to the gross domestic product. Our results have several managerial implications that are discussed in this article.

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  • Segundo Camino‐Mogro & Natalia Bermudez‐Barrezueta, 2021. "Productivity determinants in the construction sector in emerging country: New evidence from Ecuadorian firms," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2391-2413, November.
    • Handle: RePEc:bla:rdevec:v:25:y:2021:i:4:p:2391-2413
    DOI: 10.1111/rode.12771
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    1. Segundo Camino‐Mogro & Paul Carrillo‐Maldonado, 2023. "Do imports of intermediate inputs generate higher productivity? Evidence from Ecuadorian manufacturing firms," The World Economy, Wiley Blackwell, vol. 46(5), pages 1471-1521, May.
    2. Arnaud Abad & Michell Arias & Paola Ravelojaona, 2023. "Environmental Productivity Assessment: an Illustration with the Ecuadorian Oil Industry," Working Papers hal-03574542, HAL.
    3. Hongyun Zheng & Wanglin Ma, 2021. "The role of resource reallocation in promoting total factor productivity growth: Insights from China’s agricultural sector," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2350-2371, November.
    4. Arnaud Abad & Michell Arias & Paola Ravelojaona, 2023. "Environmental Productivity Assessment: an Illustration with the Ecuadorian Oil Industry," Post-Print hal-03574542, HAL.

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