LEVEL OF ECONOMIC CONCENTRATION IN FOOTWEAR PRODUCTION IN TUNGURAHUA, ECUADOR

Abstract

The purpose of this study is to evaluate the concentration level of the footwear producing companies in the province of Tungurahua of Ecuador, with the objective of inferring its market structure. Fort the analysis, the sales items of the companies classified by type of taxpayer have been used, in this case, companies and natural persons, which are recorded in the Income Tax declaration in the data base of the Internal Revenue Service (SRI) of Ecuador. Subsequently, concentration indices have been applied, such as: Herfindhal and Hirschman (HHI), HHINormalized, concentration of the largest companies (CR4), domination, entropy and entropyNormalized. Additionally, according to the total number of companies, the location of the production units within the province has been determined. The results show low concentration in the footwear sectors, as there is diversification in the sales income, but there is a geographical agglomeration in the Ambato canton of 84,6%. Therefore, it is concluded that the footwear sector of Tungurahua is a highly competitive market and is corraborated that the province represents 80% of the gross added value (GVA) of the Ecuadorian footwear production, according to the data of the National Institute of Statistics and Censuses (INEC) of Ecuador. The study serves as a starting point for further investigations that must consider other characteristics that lead to a closer evaluation of the market.