Foreignization and Industrial Economic Power in Argentina
Pablo Manzanelli and Martín Schorr

The information provided in Figures 1 and 2 is revealing, as it indicates that in the post-convertibility era, in the context of a strong increase in demand (local and international) and a considerable transfer of work income to capital,19 the global foreign capital investment coefficient was significantly below the profitability margins (which were higher than those achieved during convertibility). In other words, in spite of the notable accumulation capacity that initiated due to the “high dollar” and regressive distribution within firms and the existence of an expansive industrial and economic cycle, the contribution of multinational companies to the increase in local productive capacities was relatively limited.20

Figure 2. Argentina. Evaluation of Labor costs, Work Productivity and the Relationship
Between Productivity and Labor Costs for the Foreign Industrial Firms*
that Comprise the 500 Largest Companies in the Country, in Constant Prices. 1993-2009
(base index 1993 = 100 and rate)
Figure 1
*Leading industrial companies with foreign capital stock participation greater than 50%. Note: Labor costs that arise from deflating the average salary by the wholesale price index (wpi) of manufactured products, while the productivity is the result of the quotient between the added value at constant prices (deflated by the wpi for manufactured products) and the quantity of salaried employees.
Source: Prepared by the authors based on special data from the National Survey for Large Businesses, indec.

19 In 2009, the rate of worker exploitation for enge foreign industrial companies was 43.1% higher than in 1993 and 34.2% higher than in 2001 (Figure 1).

20 Research from Azpiazu and Manzanelli (2011) suggests that the relative investment hesitance is not exclusive to foreign capital in the country. It also characterizes a large portion of large national companies.