Determinants of Labor Productivity for Ecuadorian Companies in the Period 2009-2014

Abstract

This study determines the factors that affect the labor productivity of firms in Ecuador, introducing for the first time external factors such as agglomeration economies. Using the information at the firm level of the Science, Technology and Innovation Survey of 2011 and 2014, a multiple regression model is estimated with the Ordinary Least Squares method. The results indicate that an increase of one percentage point in the proportion of workers with tertiary education leads to an increase of labor productivity of 1%. If firms export or operate in a corporative group, their productivity would increase in 41% and 27,7%, respectively. Other factors that increase the productivity are the multiplant status and the investment in fixed capital Apart from these individual factors, the external factors such as the density and the level of competition of the firms in a given sector and region boost the individual productivity of firms.