Multinational Enterprises in Argentina: From Primary Commodity Exporter to the New Liberal Era?,

ANDRÉS LÓPEZ

The Impact of Globalization on Argentina and Chile: Business Enterprises and Entrepreneurship

Edward Elgar

Año: 2015; p. 108 - 134

Transnational companies have been key players in Argentina?s economic development over the past century and a half. Their strategies, goals and practices have changed pari passu with the transformations imposed by the various development models adopted by Argentina in this period, within the context of more general shifts related by global-scale transnationalization dynamics. Regardless of these changes, the fact remains that it is very hard to explain the evolution of Argentina?s economy without analyzing transnational companies? influences. Moreover, a long-term look reveals that their influence, measured in terms of their weight on major economic indicators, has been increasing steadily, reaching, at present, levels that are not only unparalleled in Argentine history but also extremely high as compared to international standards (and this is still basically so in spite of some renationalizations that took place after the end of the Convertibility Plan). Of course, this does not imply that the role of these economic agents has necessarily been positive. At different junctures, in fact, some groups in Argentine society have questioned the preeminent position held by TCs in the nation?s productive fabric. Certainly, the most notorious example of this sentiment took place in the late ISI phase, when Argentina tried to curtail TC operations and to promote local businesses. At other points in time (for example, during the 1976-1983 military regime), instead, TCs? slowdown came more as a result of Argentina?s scant economic appeal. However, as noted earlier, a long-term analysis reveals a growing trend for these business agents? role in Argentine economy. It is obviously hard to make an overall value judgement of FDI?s impact on Argentine development. At some points in Argentina?s history, TCs were the agents chosen by local administrations to conduct key investments for their respective economic models (for instance, railways and meat-packing plants in the agricultural exports-led economy; heavy industry and durable consumer goods in the ISI phase, and utilities in the 1990s). In this regard, it is difficult to evaluate the impact of FDI separately from that of the development policies adopted in each stage.Regardless of this caveat, it may be said, however, that TCs largely boasted larger productivity levels and used more advanced technologies than local firms (and were probably more focused on international trade). In turn, spillovers upon local businesses have been more scattered, especially in the 1990s, with an open market and an overvalued currency. Furthermore, TCs in Argentina have failed to produce an export-oriented model similar to the one found in Ireland or Singapore, among other countries, and they have largely adjusted to the local setting, rather than becoming a transformation driver for domestic productive and technological structures. In any case, a rigorous analysis would lead to an unanswerable question, what would Argentina?s economic development have been like if local companies had been the agents chosen to pursue the above-mentioned strategical goals at different points of time in the country?s history? Interestingly enough, at those points in time, stronger or weaker arguments were made to indicate that local companies were unable to make the necessary investments (and/or would have done so inefficiently). And this brings us to the other interesting side of this story: surely, the decisive role played by TCs in Argentina?s economy may be partly attributed to local businessmen?s poor image. Nonetheless, a noteworthy number of local companies ?largely built as business groups- embarked on FDI-based internationalization processes at every stage in Argentina?s economic development. While this clearly proves a remarkable accumulation of capabilities, this phenomenon is also characterized by its discontinuity ?that is, the companies that followed that path were unable to maintain their internationalization processes for long (and, in some cases, disappeared) or were acquired by TCs. Indeed, at present, Argentina only features a small number of ?multi-Latin? companies as compared to not only Brazil or Mexico but also Chile. In fact, the existence of few ?national champions? is largely a result of Argentina?s unstable economic development process ?an issue that we have tried to analyze in another study. Summing up, we may conclude that the evolution of transnationalization processes in Argentina largely reflects the ups and downs in the country?s own development path. If Argentina has failed to become a developed nation, part of the reason lies in its microeconomics and its interaction with macroeconomics and institutional issues. The analysis of these processes falls outside the purview of this chapter, but it certainly is one of the key topics to understand Argentina?s economic and social trajectory.