Business Enterprises and Entrepreneurship
Edited by Geoffrey Jones and Andrea Lluch
Chapter 5: Spanish business in Argentina and Chile since 1880
The growth of Spanish business in the Southern Cone of Latin America began in the late nineteenth century. It was initially driven by massive Spanish emigration to Argentina, and to a lesser extent, Chile and Uruguay. Simultaneously, Spanish exports boomed, and to attract foreign direct investment (FDI) a number of institutions, especially the Chambers of Commerce, were created. Between the 1920s and the outbreak of the Spanish Civil War in 1936, there was extensive Spanish business operations in this region. Between the end of the Spanish Civil War in 1939 and the early 1960s, Spain’s closed economy and the economic policies of the Franco regime thwarted outward FDI, and curtailed the presence of Spanish companies in the region. Spain’s liberalization, beginning in the early 1960s and culminating in the transition to democracy and accession to the European Union (EU) in 1986, led to a revival in Spanish multinational enterprise (MNE) investment in the region. Starting in 1980, Spanish FDI in Argentina and Chile, as well as Uruguay, grew spectacularly. Spanish investment was driven by large companies that focused on banking and finance, energy, telecommunications and transportation, sanitation, and utilities. Spain became the leading investor in Argentina, and the second largest investor in Chile, during the 1990s and early 2000s. However, Spanish MNE investment lost its momentum again as a result of both policy shifts in Latin America, especially Argentina, and a major economic crisis in Spain after 2008.
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