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

As such, analysis of the first of our established objectives will be based on identifying general economic concentration in the manufacturing industry, based on the comparison of added amounts in annual sales for the one hundred highest earning industrial firms (the leading companies) with their respective gross production values ( gpv), both using current prices. This will provide a solid reference for the global relevance of these firms in the national industry as well as the tendencies on display in the various scenarios and macroeconomic regimes that took place in Argentina between 1993 and 2009.6

Likewise, taking into account the growing interference of foreign capital in the domestic productive structure, the same measurement is replicated, but is circumscribed to the subset of foreign firms that make up the group of leading companies. In this sense, this indicator reflects the presence of sales in elite multinational companies in the value of their industrial production, which would only constitute a proxy indicator of general of the general economic concentration of manufacturing production in the hands of foreign capital (foreignization).

On the same topic, evidence presented in Table 1 unequivocally indicates that sales generate wealth for the one hundred largest manufacturing companies in the country, and the role of sales is growing, and consequently significant in the period from 1993-2009, showing an abrupt increase in the critical year of 2002 (when the level of general concentration reached 47.9%), but later leveled off and stabilized at a lower level (40.9% in the time period from 2003-2009). Still, it was much higher than the predominant level (33.1%) seen when convertibility was still in place.

Table 1

6 It is worth introducing two brief methodological digressions regarding certain implicit assumptions that do not invalidate the results of the comparison between the two variables we have described. First, the assumption that aggregate earnings of the leading manufacturing companies do not differ greatly from the production value. In other words, this theory would ignore the certain possibility that sales for large firms include a portion linked with the commercialization of final imported goods and/or third-party production (consequently, they wouldn’t be part of the respective gpvs). However, as demonstrated in previous research (Schorr, 2004), for analytical purposes, the adoption of this assumption does not affect aggregate results for the economic transcendence of leading companies, and even less so, how these results will evolve in the analytical future timeframe (or, in other words, these possible differences are marginal on the aggregate level). Secondly, it is fitting to note a few similar considerations regarding the incidence of stock variation, or the difference between the value of production in a determined year and its effective realization – or not – in the same year. Regarding differences between convertibility and post-convertibility and macroeconomic functioning, as well as the structural trajectory of the domestic manufacturing sector in both phases, please see work from Azpiazu and Shorr (2008); cenda(2010); Fernández Bugna and Porta (2008) and Kosacoff (2008).