Volume 43, Number 170,
July-September 2012
Foreignization and Industrial Economic Power in Argentina
Pablo Manzanelli and Martín Schorr
STRUCTURAL PHYSIOGNOMY OF DIFFERENT SEGMENTS IN THE INDUSTRIAL ECONOMIC POWER ( ...continuation )

In this sense, during the period analyzed, the average size of foreign firms (measured by the quotient between the production value and the quantity of firms) was 30% higher than the corresponding number among the entire set of elite manufacturers, 65.4% higher than the number for associations, and 134.3% higher than the number of national leaders. The insertion of foreign capital in diverse manufacturing branches in which economies of scale join with oligopolistic leadership, added to the almost total absence of restrictions associated with financing and/or market size (equally rectifiable in the framework of a multinational or intra-corporate strategy), assumes a major role in the contrast with large national firms.

The discrepancies we have highlighted are even more pronounced when respective labor productivity is taken into account (value added per employee). Looking at annual averages from 2003-2009, the productive yield of salaried employees in foreign firms was 39.3% higher than the total, 121.3% higher than the number for associations, and 197.4% higher than the number for national firms. The fact that salary gaps within the set of the largest industrial firms in the country by origin of capital have been much less accentuated than respective work productivity17 suggests that for leading companies controlled by foreign investors, the income distribution was much more regressive than for the rest of large firms. In other words, foreign businessmen appropriated a larger portion relative to the product generated by the salaried employees.

For this reason, the productivity/average salary correlation in multinational firms was 16.8% higher than the number for the entire group of manufacturing sector companies that are part of the enge, 52% higher than the number for associations and 84% higher than the number registered in the subgroup of leaders controlled by domestic capital. The participation of salaries in the added value of foreign firms (14.9%) was much lower than the number given for associations (22.7%), and in national firms (27.5%), while the gross exploitation surplus per employee in transnational companies was 3.5 times higher than those controlled by local stockholders and 2.4 times higher than the number for associations.

The unequal relative influence of different types of companies in terms of the quantity of firms, production and global employment is evidence that leading manufacturers where foreign capital holds a majority role or holds all of the stock package present lower relative capacity to generate employment. This can be seen in the relatively low level of employee requirements registered by this type of company in the analyzed period,18 or in the fact that the average number of salaried employees per firm that is seen in foreign firms was lower than the number seen both for national companies and associations.

Reproduction on the local level, which is still at a very different level in terms of prevalent economic-technological standards in countries of origin for local partners, as well as sectorial insertion in the domestic manufacturing sector, results in scales and production functions that are much more capital-intensive than those of their national counterparts. This is even more true because there are practically no restrictions (financial or any other type) for international corporations that might condition or limit the adoption of those technologies that would guarantee them the most appropriate path of accumulation and expanded reproduction of capital on the local level, as well as in how they insert themselves into the world and/or regional scale, based on the possibilities that a country like Argentina can offer.

Although they played a decisive role in the formation of capital carried out by the set of manufacturing corporations, the information on display in Table 5 reveals that the investment rate (over added value) of the panel’s foreign firms was barely higher than the total. This is in spite of the fact that the level of surplus appropriation from multinationals was significantly higher than the rest of the firms on the panel. And this in keeping with the designation of these resources to, among other areas, sending earnings and dividends abroad, paying fees and royalties, capital flight through various routes (discretional management of the amount of exports and/or imports in intra-corporation operations, total or partial cancellation of credits granted by headquarters and/or some subsidiary located in the country, etc.). Hesitancy to invest could also be linked to majority insertion into oligopolistic industrial markets and the achievement of a certain level of techno-productive maturity that did not require investments of relative importance to maintain a competitive position in the domestic and sub-regional market. Beyond what the headquarters needed, in their search to minimize absolute costs on a global level, their strategies often were at odds with the “rational expectations” of the local situation or the circumstances in any of the countries they operated in.

17 The information shown in Table 5 indicates that average tax payments from employed workers in firms controlled by foreign capital was 45.6% higher than what was shown for associations, and 61.4% higher than the number for national companies.

18 As seen in the evidence presented here, for foreign companies, the said coefficient (which measures number of employees generated per production unit) was 41.7% lower than in associations and 59.1% than those controlled by national investors.

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 48, Number 191, October-December 2017 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Nov 13th, 2017.
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