Argentina's bussiness leadership and its role
in economic development
Juan E. Santarcángelo and Guido Perrone

Foreign capital not only manages to retain its hold at extremely high levels among Argentina’s business leaders during this period of new economic growth, but also to act as a protagonist that excludes others from the process.

Once the process of ‘foreignization' of Argentina’s business leadership is clear, it is important to examine the impact that large companies have had on the generation of employment, which has also seen significant growth.9 To examine the leadership’s contribution to employment generation during the post-Convertibility period, the number of salaried jobs corresponding to leading companies can be observed in relation to the same variable in the total economy. Both variables are shown in Figure 3.

Figure 3. Salaried Jobs in the 500 Largest Companies. The Relationship Between Jobs in Large Companies
and Total Employment. 1993-2009
Source: Prepared by the authors on the basis of data supplied by INDEC in ENGE.

Over the course of the 1990s the level of employment in absolute terms among business leaders shows a slight decline, although the decline is aggravated in periods of crisis. At the end of the Convertibility period, the business leaders generated around 500,000 salaried jobs. In the meantime, from the point of economic recovery, the number of salaried jobs in leading companies rises sharply, showing an increase of 40% in absolute terms at the end of the period compared with 2003.

However, if we look at the number of jobs among business leaders in relation to the number of the total economy, the tendency during these years differs considerably. In 1993, business leaders accounted for 6.5% of total salaried jobs, with their influence declining sharply over the course of the 1990s. There is no reverse in this tendency at the end of the Convertibility period. Instead employment in leading companies stabilizes at 5% of the total over the course of the decade. This is significant in that the economy as a whole sees a substantial increase in the number of salaried jobs per unit of output (the inverse of labor productivity) something which is not observed among leading companies.

The meager contribution of business leaders to employment generation during these years is further accentuated if leading company performance is examined in terms of value added.10

9 It is important to clarify that the total employment generated within the business leadership is generated both directly and outsourced to other companies. Given that there are no statistics available on the latter we are limited in this study to analyzing employment generated directly by business leadership.

10 The Gross Value Added (GVA) of a company is the difference between the production value and intermediate consumption. It takes into account wages and salaries, social contributions, taxes on production, depreciation and operating surplus. In this sense, the added value of the company is equivalent to the total added value of production units. The added value of auxiliary units that provide services is consolidated in these units.