Employment and exports in Ecuador: a cointegration analysis

The purpose of the research is to determine the relationship between exports and employment in Ecuador in the period 2007 - 2022, since the possible effect of exports on employment generation has become an important political and economic issue for developing countries. The study uses descriptive analytical methods to examine the behavior of the variables over time and explanatory methods to analyze the behavior of the variables, such as the Johansen cointegration test to verify the long-run relationships and the vector error correction model and the Granger causality test to evaluate the behavior of the variables in the short run. Also, control variables such as wages, exchange rate and investment are included to explore their indirect influence on the studied relationship. The main findings show a connection and a bidirectional relationship between exports and employment, which differs according to the time frame. In the long run, exports tend to stimulate employment, while, in the short run, an increase in employment may result in an increase in exports. In conclusion, the results have important implications for understanding how these two fundamental dimensions of the Ecuadorian economy are related and can influence each other over time.