Discussing the inter-sectoral linkages in Ecuador, with a focus on the oil sector

• Author: Orellana Bravo M., Mendieta Munoz R., Beltran Romero P., Raileanu-Szeles M.
• Pages: 407-414

Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 8 (57) No. 2 - 2015

Discussing the inter-sectoral linkages in Ecuador,

with a focus on the oil sector

Mercy ORELLANA BRAVO1, Rodrigo MENDIETA MUÑOZ2,

Pablo BELTRÁN ROMERO3, Monica RĂILEANU-SZELES4

Abstract: The oil sector represents a key-sector of the Ecuadorian economy, characterised

by a high level of value added and a high weight in the national exports. This paper tries to

find out whether the oil sector is able to induce positive effects for other economic sectors,

and to also measure these effects in comparison with those generated by other sectors. The

empirical analysis uses the income and employment multipliers, which are derived from

Leontief Input-Output tables. The results indicate that the Ecuadorian oil sector is the most

independent one, so that policies enhancing stronger linkages with other sectors are highly

recommended.

Key-words: multipliers, input-output tables, oil sector

1. Introduction

Over time, the oil sector has represented one of the most important sectors in

Ecuador because of the fiscal revenues that it generates and the significant weight it

has into the Ecuadorian exports. Although the role of the oil sector in the Ecuador’s

growth and development has often been approached and debated in the literature, the

relationship of this sector with other branches of the national economy, as well as its

potential to generate value added represent new topics of interest for the Ecuadorian

economy.

The literature on the input-output multipliers of the Ecuadorian economy is

rather scarce. Only partially the issue of income multipliers has been addressed in

the case of Galapagos Islands and only for the tourism sector (Taylor et al., 2006),

1 Facultad de Ciencias Económicas y Administrativas, and Grupo de Investigación en Economía

Regional, Universidad de Cuenca, Ecuador, mercy.orellana@ucuenca.edu.ec

2 Facultad de Ciencias Económicas y Administrativas, and Grupo de Investigación en Economía

Regional, Universidad de Cuenca, Ecuador, rodrigo.mendieta@ucuenca.edu.ec

3 Facultad de Ciencias Económicas y Administrativas, and Grupo de Investigación en Economía

Regional, Universidad de Cuenca, Ecuador, pablo.beltran@cuenca.edu.ec

4 Transilvania University of Brasov and Prometeo at University of Cuenca, Ecuador,

monica.szeles@unitbv.ro