Production and business profitability in Ecuador's agricultural sector

This paper analyzes the main determinants of the profitability of companies belonging to the agricultural sector in Ecuador during the period 2007-2017. We present data indicating that productivity has a positive effect on the profitability of the firms that make up the agricultural sector, suggesting that these firms have a greater competitive advantage, reflected in higher profit levels. However, capital stock, land valuation, foreign direct investment, exports and age are variables that have a negative effect on profitability. Likewise, when there are improvements in GDP per capita, the profitability of firms in the agricultural sector is positively affected due to an increase in aggregate demand for food products, which stimulates the sector's performance.