Beneath the Surface: The Impact of Radical Economic Reforms on the Outward Orientation of Argentine and Mendozan Firms, 1989–1995
The main argument of this article is that in order to assess accurately the impact of a market liberalisation programme such as the one Argentina has undergone, one must look beneath the aggregate statistics and analyse underlying changes in critical market structure and organisational variables. While aggregate trade figures imply that the country has been successful at reintegrating itself into the world economy, two underlying trends reveal potential threats to the country's long-term development. These trends relate to the level of value added being created in the country, particularly with regard to its exports, and to changes in the composition of its trading partners. Despite four decades of relative decline, Argentina is still the third largest economy in Latin America and ranks at the top of the region in terms of per capita income and most standard indicators of social development. Furthermore, since I990 it has been the second largest destination of foreign direct investment (FDI) in the region after Mexico.1 In spite of the impact of the recent economic reforms, however, Argentina still has one of the largest government sectors, highest average trade tariffs, and least outward-oriented economies in the region.2 And while Argentina was home to some of the first multinationals in any developing country,3 Brazil and Mexico currently have more firms both in Latin America's Top 500 ranking and on the United Nation's list of the largest multinationals headquartered outside the Triad (USA, Japan, European Union) economies.4 The purpose of this article is to assess the differential