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Agglomeration Economies: An Analysis of the Determinants of Employment in the Cities of Ecuador

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Department of Economics, Universidad Técnica Particular de Loja (UTPL), 11-01-608 Loja, Ecuador
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Financial Economy and Accounting Department, Faculty of Business, Finance and Tourism, University of Extremadura, 10071 Cáceres, Spain
3
Business Management and Marketing Department, Faculty of Business Sciences and Tourism, University of Vigo, 32004 Ourense, Spain
*
Author to whom correspondence should be addressed.
Symmetry 2019, 11(11), 1421; https://doi.org/10.3390/sym11111421
Received: 18 September 2019 / Revised: 6 November 2019 / Accepted: 11 November 2019 / Published: 16 November 2019
The objective of this investigation is to study the role of agglomeration economies (manufacturing) in urban employment growth, as a proxy for economic growth, between 1980 and 2010 in Ecuador. The three measures of agglomeration-specialization, diversity, and density-are tested to determine their effect on employment growth in industries. The empirical analysis is based on firm- and city-level data from manufacturing activities. A model is proposed to estimate the effect of agglomeration economies on the growth of employment and a regression is conducted using instrumental variables. In particular, the two-stage least squares (2SLS) estimator is used. We conclude that localization economies measured by a specialization index have a positive impact on the growth of employment in the period analyzed. The results are similar to those obtained by other work carried out both in developed and developing countries. View Full-Text
Keywords: agglomeration economies; employment growth; economic growth; Ecuador agglomeration economies; employment growth; economic growth; Ecuador
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Torres-Gutiérrez, T.P.; Correa-Quezada, R.; Álvarez-García, J.; del Río-Rama, M.C. Agglomeration Economies: An Analysis of the Determinants of Employment in the Cities of Ecuador. Symmetry 2019, 11, 1421.

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