Social and Economic Infrastructure and Its Relationship With Regional Economic Growth in Ecuador

Abstract

In the literature on growth, infrastructure, in addition to other factors, is identified as a determining element in the growth of regions from a long-term perspective. However, there are few studies where the unit of analysis is disaggregated down to the regional level. Therefore, this research aims to explore the importance of infrastructure (social and economic) in the economic growth of Ecuador´s provinces. The methodology used leads to the calculation of a Global Productive Infrastructure Index (GPII) composed of two categories: Social Productive Infrastructure (SIP), and Economic Productive Infrastructure (EPI) (Hansen, 1965). In addition, econometric estimates are made of the relationship between infrastructure and economic growth, the latter measured by the Gross Added Value of each province. The results of the empirical models used indicate that the economic productive infrastructure is essential for the economic growth of Ecuador´s provinces. It is made up of energy infrastructure, transport infrastructure and communications infrastructure, of which the last two are the most representative and affect growth directly. In terms of the disaggregation of indices, it is observed that, in general, the provinces with the highest economic and global index and, therefore, the highest growth are the provinces of Pichincha, Azuay and Guayas.