Analysis of the Ecuadorian productive network in 2019, using Network theory

The present study analyzes the centrality of the 70 productive sectors in Ecuador according to the Input-Output table for the year 2019, in order to identify the most influential sectors in the diffusion of productivity shocks. For this purpose, four weighted centrality indices are used: Degree Centrality, Closeness Centrality, Betweenness Centrality and Alpha Centrality. The results suggest that the sectors of wholesale and retail trade, transportation and professional activities are the most influential in the Ecuadorian economy, due to their high centrality and participation in the commercial transactions. Furthermore, the distributions of the centrality indices hold the power law which remarks the high heterogeneity of the productive network. Given this, a microeconomic shock to any of these sectors could spread “downstream” cascade effects throughout the intersectoral links and generate aggregate fluctuations, as pointed out by the theory of shock diffusion