The Spatial Structure of EcuadorAnalysis Using Market Potentials

Abstract

The goal of this chapter is to analyze the spatial structure of Ecuador, that is, to find out if the economic activity in this country is clustered in or around several provinces and/or regions. In other words, we want to establish from a geographical economics perspective which provinces are considered belonging to the so-called core and which ones to the periphery. We will carry out the analysis by computing each region’s market potentials. The methodological approach of this study is based on the well-known Harris, 1954, market potential concept of the regional economics literature. For each province and using as the time frame the period 2007–2014, we have computed its Harris, 1954, market potential, which takes into account the economic activity in the surrounding locations weighting them by the inverse of the distance. With regard to the weighting scheme, we will use two different proxies: on the one hand, the distance measured in kilometers between the capital of each province, and on the other hand, the distance measured in terms of the time needed to travel from the capital of one province to the other.