Foreign companies in Italy and Argentina: Investment patterns and organizational forms, 1914-1960

COLLI ANDREA; LANCIOTTI NORMA; LLUCH ANDREA

Paris

Congreso; European Business History Conference 2012; 2012

European business History Association

The paper explores the waves of entry, evolution and organizational strategies of foreign companies in Italy and Argentina from 1913 to 1960 to shed light on the global trends of foreign direct investment inflows, and identify the investment patterns of multinational companies in two culturally open and peripheral host economies. Based on the comparative analysis of country-of-origin, entry strategies, type of activities and key drivers of top-100 industrial foreign firms in both economies, the study identify that in the interwar period, ownership and location advantages based on proximity, familiarity and local resources were the main drivers of the investment of foreign firms. This pattern gradually changed toward the investment in new industries based on the exclusive competitive advantages developed by MNEs along this period. From the second postwar, the maturity of Italian metalmechanical industry prevented the entrance of foreign firms in well-developed industries and promoted the creation of joint ventures between foreign and Italian firms. On the contrary, industrialization by imports substitution in Argentina, failed to achieve economies of scales in new industries in the interwar period; therefore, greenfields played a major role among the entry strategies of MNEs, restricting the effects of knowledge and technological spillovers as they primarily focused on the domestic market highly protected.