Market structure and wages: empirical evidence for Ecuador using microdata

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Published: mar. 18, 2021
Keywords:
Market structure, Wages,, Human capital, Ecuador

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Rafael Alvarado
Universidad Nacional de Loja
Pablo Ponce
Universidad Nacional de Loja
Lethy Minga
Universidad Nacional de Loja
Tania Luna
Universidad Nacional de Loja
Jorge Flores
Universidad Nacional de Loja

Abstract

One of the determinants of the income level of companies is the degree of influence theyhave in the market. The market power of companies has a direct impact on wages. This researchaims to examine the effect between the market structure of companies and wagesfor Ecuador using microdata, using Krugman’s (1998) theory of market structure andwages.We use cross-sectional data published by the National Institute of Statistics and Censuses(2010). Statistical information shows that there are no companies with monopoly powerin the market; rather, most companies have low influence. The econometric results otherrobust empirical support in favor of the theory of market structure and wages, evidencinga positive relationship between the two variables in the case of Ecuador. A public policyimplication derived from this research is that state intervention should be aimed at promotingthe maintenance of competition and diversifying economic activity, offering moreconsiderable influence on companies and salary advantages for workers.

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How to Cite
Alvarado, R., Ponce, P., Minga, L., Luna, T., & Flores, J. (2021). Market structure and wages: empirical evidence for Ecuador using microdata. Revista Económica, 8(2), 60–66. Retrieved from https://revistas.unl.edu.ec/index.php/economica/article/view/910
Issue
Vol. 8 No. 2 (2020): Revista Económica (Julio-Diciembre 2020)
Section
RESEARCH ARTICLES
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