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Analyzing the Regional Economic Convergence in Ecuador. Insights from Parametric and Nonparametric Models

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  • Monica Raileanu Szeles

    () (Transilvania University of Brasov, Romania, Institute for Economic Forecasting, Bucharest, Romania, and Prometeo at Cuenca University, Ecuador)

  • Rodrigo Mendieta Muñoz

    () (Facultad de Ciencias Económicas y Administrativas, and Grupo de Investigación en Economía Regional, Universidad de Cuenca, Ecuador)

Abstract

This paper analyses the process of regional economic convergence in Ecuador from 2007 to 2014, using parametric and non-parametric models. Applying a broad range of methods allows deriving complex empirical findings about the process of convergence, in the context of the high economic heterogeneity that persists over time in the Ecuadorian economy. Encouraging the enlargement of private sector, entering and staying more years in education, increasing the effectiveness of public investment and discouraging the inefficient credit activity are found to be important drivers of economic growth and regional convergence. Additionally, the non-parametric analysis reveals that the progress on the path of regional convergence is mainly due to the 2007-2010 upward transition of the group of poorest provinces. Still, the regional GVA distribution remains polarized and it seems that the group of rich provinces advances faster than the majorities’ one, making the achievement of regional convergence even more difficult in the years to come.

Suggested Citation

  • Monica Raileanu Szeles & Rodrigo Mendieta Muñoz, 2016. "Analyzing the Regional Economic Convergence in Ecuador. Insights from Parametric and Nonparametric Models," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 43-65, June.
  • Handle: RePEc:rjr:romjef:v::y:2016:i:2:p:43-65
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    References listed on IDEAS

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    Cited by:

    1. repec:rjr:romjef:v::y:2018:i:1:p:124-139 is not listed on IDEAS
    2. Nicola Pontarollo & Mercy Orellana Bravo & Joselin Segovia Sarmiento, 2017. "The determinants of subjective wellbeing in a developing country: The Ecuadorian case," JRC Working Papers JRC109319, Joint Research Centre (Seville site).
    3. Rodrigo MENDIETA MUÑOZ & Nicola PONTAROLLO, 2018. "Territorial Growth in Ecuador: The Role of Economic Sectors," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 124-139, December.
    4. repec:rjr:romjef:v::y:2017:i:3:p:130-149 is not listed on IDEAS

    More about this item

    Keywords

    regional convergence; gross value added; parametric models; nonparametric models;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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