Business Groups in nineteenth and twentieth century Argentina

BARBERO MARIA INES

The Impact of Globalization in Argentina and Chile. Business Enterprises and Entrepreneurship

Edward Elgar

Lugar: Cheltenham; Año: 2015; p. 6 - 44

Since the mid 1800s until the early 21st century, Argentine economics went through several phases in terms of performance, economic structure and institutional framework. Over those decades, Argentina shifted from an open, deregulated economy (1870-1914) to increased closeness and state regulation (1914-1975), and, after a transition with stop-go moves towards greater liberalization (1976-1990), the country plunged into a pro-market reform process in the 1990s (that, in turn, came to an end with the 2001-2002 crisis). Regardless of these transformations, diversified business groups have been, until the end of 20th century, the prevailing organizational pattern adopted by large local private companies in Argentina ?as in many other late-developing countries in and outside Latin America. Business groups have shared the stage with stand-alone domestic firms, foreign companies and state-owned enterprises but have remained present in the large-company segment at all times, with more or less notoriety. This chapter intends to explore the circumstances that led to the emergence and development of business groups in Argentina between 1870 and 2010, identifying prevailing types at specific periods and trying to determine the advantages that afforded them a predominant role among domestic private large firms. It draws from information provided by historical research studies conducted since the mid 1980s ?particularly, case studies on several groups created both in the late 1800s and mid 1900s. This information has been complemented with data supplied by more general works by historians and scholars from other disciplines. As such, this chapter aims to contribute to the comparative study of business groups in emerging countries, offering empirical evidence that help test existing hypotheses on why business groups exist, what their salient features are, and the types of capabilities that enable them to compete satisfactorily in several markets. While not necessarily apt for generalization, historical case study findings can help trace back the origins, track records and transformations experienced by business groups, as well as the strategies pursued by their leaders and the outcomes of their decisions and actions. These findings also illustrate the different kinds of business groups prevailing in specific settings and time frames. These dimensions prove crucial when it comes to establishing what business groups are, why they emerge, and the effect they have on the economies and societies where they operate. At the same time, from the point of view of comparative studies, a historical perspective adds to contemporary cross-sectional studies typically produced by economists and other social scientists by recording changes over time. Following this introduction, this chapter has been organized in six sections. The first one provides some definitions associated with the business group notion and introduces the parameters to analyze and compare Argentine groups in the long term. The second section explores the emergence and development of a first generation of business groups during the booming export-based economy of 1870-1914. The third section focuses on the interwar period, while the fourth one looks at the 1945-1990 phase, with the creation and expansion of a second generation of groups, including both the peak of import-substitution industrialization and early attempts to introduce pro-market reforms. The fifth section delves into the effects of the 1990s? pro-market reforms and 2002 crisis on Argentine business groups. Finally, chapter conclusions provide an overall, long-term view of Argentine business groups, revisiting the questions posited in the introduction and offering some answers based on empirical historical evidence available.