mathematics Article Location Decisions of New Manufacturing Firms in Ecuador. Agglomeration Mechanisms Tania Paola Torres-Gutiérrez 1 , Ronny Correa-Quezada 1 , María de la Cruz del Río-Rama 2 and José Álvarez-García 3,* 1 Department of Economics, Universidad Técnica Particular de Loja (UTPL), Loja 1101608, Ecuador;
[email protected] (T.P.T.-G.);
[email protected] (R.C.-Q.) 2 Business Management and Marketing Department, Faculty of Business Sciences and Tourism, University of Vigo, 32004 Ourense, Spain;
[email protected] 3 Financial Economy and Accounting Department, Faculty of Business, Finance and Tourism, University of Extremadura, 10071 Cáceres, Spain * Correspondence:
[email protected] Received: 3 June 2020; Accepted: 4 August 2020; Published: 7 August 2020 Abstract: This investigation seeks to explore the importance of agglomeration mechanisms in the location decisions of new manufacturing firms in Ecuador, based on sector and canton level data for the 2000–2010 period. A model is proposed to explore the relative importance of agglomeration mechanisms in location decisions of new manufacturing companies, a regression is performed using instrumental variables, the econometric estimation is developed, and an identification strategy is proposed. The results of the empirical analysis show that the learning mechanism, and history, have a positive and significant impact on the creation of new firms. An increase of 1% in the transfer of knowledge in the industries and cantons of the country is correlated with the increase in the location of new firms in the order of 9.2%. In turn, history has a positive and significant effect on the creation of new firms, in industries and cantons characterized by a past industrial environment.