Open AccessCompetition, market concentration and innovation in Ecuador
Author(s) -
Héctor Alberto Botello Peñaloza,
Isaac Guerrero Rincón
Publication year - 2019
Publication title -
ecos de economia/ecos de economía
Language(s) - English
Resource type - Journals
eISSN - 2462-8107
pISSN - 1657-4206
DOI - 10.17230/ecos.2019.48.2
Subject(s) - exploit , market power , competition (biology) , market concentration , market share , probabilistic logic , selection bias , industrial organization , census , market competition , market size , market share analysis , market structure , business , economics , econometrics , market microstructure , microeconomics , order (exchange) , market economy , marketing , commerce , statistics , finance , computer science , monopoly , ecology , sociology , biology , demography , mathematics , population , computer security
The objective is to determine how market concentration affects firms’ decisionsto innovate. With company-level data l from the 2010 Ecuadorian economiccensus , a probabilistic/linear model was calculated with correction for selectionbias. Ecuadorian companies have a limited innovation capability and there is apersistence in market concentration. The estimates confirm the theory of marketpower in the propensity to innovate for both models. Consequently, increasedmarket share leads to an increase in the likelihood of innovation, thanks to theability to exploit the gains from these processes.