Oil Dependency: Impact on the economy of Ecuador

Abstract

Oil is Ecuador's main export product and its financial income an important part of the General State Budget. Being Ecuador a country dependent on crude oil is the reason why this investigation is carried out. For this purpose, an investigation with a quantitative approach was used, with a descriptive and explanatory scope strengthened in the Solow model, for which an econometric model with time series data was estimated using the Ordinary Least Squares (OLS) method. The results show that oil barrel exports have a positive effect on economic growth. Likewise, it is concluded that oil imports, the price of oil, will have a greater dynamism in economic growth, since there is a strong causality with the aforementioned variables.