Systems of Banking and Production in Argentina
Víctor Fernández, Carolina Lauxmann and Julio Tealdo
Sectorial Financing. Primary Industrialization Patterns, Concentrated and Foreignized
Vs. Dynamism, Decentralization and Endogeneity ( ...continuation )

The origin of capital ownership for this concentrated set of businesses is largely foreign. The tendency towards foreignization of the productive apparatus initiated in the 1990s17 has been maintained up to the present day, even getting stronger for leading businesses following the 2001 crisis (Figure 15).

Figure 15. Evolution of the Percentage Participation of National and
Foreign Capital Firms Among the 500 Leading Companies (1993-2009)
Source: Prepared by the authors, based on information from indec, Large Companies.

The banking system’s contribution to financing and, in large measure, to the survival and deepening of a concentrated and foreignized productive structure, has discouraging consequences for the possibility of consolidating a dynamic accumulation pattern. The Argentinean experience with Foreign Direct Investment (fdi) and Multinational Companies (mc), despite what the mainstream may say, does not show an improvement in local economic efficiency or a subsequent qualitative incorporation in global commercial networks. On the contrary, it has implied a deepening of the re-valuation and subordinate participation of Argentina in the global market. Foreign affiliates import more technologically complex goods from their headquarters, with scarce local development in strategic activities that require qualified labor, and they export, principally, primary goods or manufactured goods that make intensive use of natural resources (Chudnovsky and López, 2002). The concentrated character of the capital structure does nothing more than reinforce the lack of dynamism in the production system, allowing large businesses — both local and foreign — the protection of a lax regulatory framework, and the chance to abuse their dominant position, bringing about practices that are not associated with learning and innovation, and affecting Argentina’s economic structural changes.

17 For a detailed review of this process, see Basualdo (2000).