Abstract
An economic group is a collection of parent and subsidiary corporations that operates as a single economic organism under the same legislature of control. The decisions taken by the economic groups in any country are among the most influential factors that impact its market and the country’s economic political scenario. This work studies the impact of the Ecuadorian economic groups from 2015 to 2019, where a historical peak of 300 economic groups was reached. However, the taxes representativeness of the Ecuadorian economic groups remained stable during the same period of analysis. We analyzed the financial and fiscal variables of the Ecuadorian ranking of firms, and detected the following of its economic groups: (i) They are still concentrating wealth despite the implementation of hard government policies to transparent the financial and economic information; (ii) They tend to compete in oligopolistic markets, given that their economic and financial decisions are interconnected with their family firms or consortium groups; (iii) They operate in a behavioral nature that follows a linear association between the total income, total assets, total equity, and total tax collection. We hope this work will serve as a future reference for researchers focused on the economic groups of Ecuador and Latin American countries.
Highlights
An economic group is defined as a conglomerate of firms that are grouped together by their financial capital (Navarro 1975)
We have empirically examined the financial and fiscal variables of the Ecuadorian economic groups, using the rankings of firms provided by the Servicio de Rentas Internas del Ecuador (SRI) from 2016 to 2020
Our results show that the number of Ecuadorian economic groups increased during the period of 2015–2019
Summary
An economic group is defined as a conglomerate of firms that are grouped together by their financial capital (Navarro 1975). The nation-state concept coined by the author is justified on the economical and financial integration of Ecuador, mainly based on the idea of an economy open to both exports and local production, enabling the governability of the country. Most of the Ecuadorian elite groups have been, throughout history, concentrated in Quito, Guayaquil, and Cuenca The pressure of these economic groups on the government decisions have been visible across (i) the primary products exportation program (mainly for the coastal region), (ii) the manufacturing project for the north-central Andes region, and (iii) by the law of agricultural and industrial development from 1981. The remaining of the article is organized as follows: Section 2 presents the literature review regarding the formation of economic groups in Ecuador; Section 3 presents our research methodology; Section 4 reveals the empirical findings and discusses the results; and Section 5 highlights the conclusions and offers recommendations and research directions for future researchers
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