Analysis of Convergence for the Ecuadorian case at the cantonal level in the period: 2007-2017

Abstract

The objective of this study is to analyze the existence of convergence and determine its magnitude at the cantonal level for the Ecuadorian economy during the period 2007 to 2017. Following the methodology proposed by Quah, the transition matrix of the Ecuadorian economy at the cantonal level is estimated, following the postulates of Barro and Sala-i-Martin, the sigma convergence process is identified and an econometric model is estimated using OLS and cross-sectional data, to determine the existence and magnitude of the beta convergence. The main findings indicate that Ecuador shows an improvement in the final mobility situation. Furthermore, the absolute convergence rate amounts to 3.62% annual average at the cantonal level, while, by including conditioning factors in relation to physical infrastructure of households, electricity consumption and education, the speed of convergence amounts to 4.67% average annual, which denotes key areas of intervention, among others, in order to shorten territorial gaps in Ecuador.