Foreignization and Industrial Economic Power in Argentina
Pablo Manzanelli and Martín Schorr
INTRODUCTION ( ...continuation )

From various points of view, not only those closest to the orthodox school of thought, there are a wide range of approaches in terms of what is an “inevitable process,” especially in the current capitalist phase on a global scale. And therefore, there is little that can and should be done to control or regulate this by state intervention. In the best-case scenario, this should generate the necessary and sufficient conditions to bring about “normal” and “sustainable” development of this “inevitable tendency.”

These widely known arguments almost completely avoid the intensity and domestic impact of this process in diverse fields (productive structure, international insertion, capital formation, labor market, inflationary rhythm, income distribution, foreign and fiscal accounts: in sum, the country’s level of development/under development). Thus, with a few exceptions, in the local environment, the multiple implications, generally negative, that foreignization tends to unleash on industry (and on the Argentinean economy as a whole) are not questioned. On this basis, we can find elements to advance in formulating a diagnostic of the situation that allows for the creation of strategic public policies.3

Given this context, the purpose of this study is to analyze the dynamics of the foreignization of industrial economic power in the post-convertibility era, keeping in mind everything that occurred throughout the 1990s. This work also aims to elucidate some of its principal effects in in terms of structure, labor, distribution and insertion in the global and regional market, strengthening (or not) of domestic techno-productive capacity, inflexibility (or not) in the formulation of public policy, etc.

The next section will analyze the principal characteristics describing the process of foreignization of elite manufacturing companies that took place throughout the past decade. Building on this foundation, the following section seeks to identify principal structural and behavioral differences among different fractions of large manufacturing capital. The work concludes with a few final reflections.


Based on the well-known theoretical and empirical assumption that multinational companies tend to focus on oligopolistic markets that offer products from registered brands and/or differentiated products,4 it is relevant to investigate two juxtaposed phenomena in Argentina’s industrial dynamics in the post-convertibility era: growing economic concentration and elevated penetration from foreign companies among elite local businesses and within the manufacturing sector.

In order to estimate the scope of these issues, this section has two purposes: (1) gauge the real economic significance of the top industrial companies5 and the foreign companies that are part of this group, and (2) evaluate the underlying characteristics of the upper echelons of manufacturing companies, mainly focusing on the origin of capital for the companies that are part of this group. The purpose of this is to identify the relative weight that multinational firms acquire among the select group that comprises the industrial economic power.

To achieve this goal, it is fitting to reexamine Sylos Labini’s economic and methodological contributions (1966) regarding three types of concentration that distinguish between the following: plants (“technical concentration”), businesses (“economic concentration”) and groups of companies united by stocks (“financial concentration”). The latter best captures the level of real concentration in an economy; still, “economic concentration,” which we focus on in this study,” serves as a good indicator to advance in understanding this phenomenon, and is even more fitting when we are talking about what this author calls “general concentration” (or global). In other words, concentration that refers to “a wide array of economic sectors, like the transformative industry” (Sylos Labini, 1966: 19).

3 There are few recent works that have focused on these questions. Drawing on a diverse array of analytical approaches and methodologies, the following have contributed: Arceo, González y Mendizábal (2010); Azpiazu and Schorr (2010b); Bezchinsky and others (2007); Burachik (2010) and pnud (2009).

4 “A quick look at the structure of products and markets for the main mpes (multinational producer enterprises) of the manufacturing industry reveals that they tend to concentrate themselves in oligopolistic industries that offer products with registered brands or differentiated products” (Dunning, 1976: 24). Also see Graham (1992); Hymer (1972) and Vernon (1973).

5 These are the 100 manufacturing companies with the highest annual earnings in the country according to information from the Area for Economics and Technology of the flacso, based on company reports and the journals Mercado and Prensa Económica . The methodological criteria used in the creation of this panel of leading corporations can be found in Azpiazu (1996) and Schorr (2004).