Determinants of the Manufacturing Sector in Ecuador

The world economy increasingly requires industries with greater specialization that provide higher value-added products to meet the diverse needs of society. In this sense, the objective of this research is to determine the productive capacity of the manufacturing industry in Ecuador, taking into account its financial resources and available human talent. The study employs a Cobb-Douglas production function and incorporates economic freedom as a structural variable. Panel data analysis is conducted at the provincial level, covering the period from 2010 to 2020. The results demonstrate that economic factors exhibit expected behavior within this type of production function. However, the inclusion of economic freedom in the analysis yields peculiar results, which suggests political implications that need to be considered at the conclusion of the study.