Production and enterprise profitability in Ecuador’s crop-growing sector

This article analyses the key determinants of enterprise profitability in Ecuador’s crop-growing sector in 2007–2017. It presents data showing that productivity has a positive effect on the profitability of the firms in the sector, which suggests that higher productivity confers a competitive advantage that is reflected in higher profit levels. In contrast, capital stock, land valuation, foreign direct investment, exports and firm age are variables that are negatively related to profitability. Lastly, per capita GDP growth boosts enterprise profitability by increasing the aggregate demand for food products, which stimulates the sector’s performance.