The Impact of Globalization on Argentina and Chile

The Impact of Globalization on Argentina and Chile

Business Enterprises and Entrepreneurship

Edited by Geoffrey Jones and Andrea Lluch

During the first global economy of the late nineteenth century and early twentieth century, Argentina became one of the richest countries on earth, while Chile was an economic backwater. During the contemporary era of globalization, liberalization and institutional reforms in Chile provided a context in which business grew, while in Argentina, institutional dysfunction made productive business hard to sustain. This book explores the complex relationships between corporate behavior, institutions and economic growth through the contrasting experiences of Argentina and Chile. In nine chapters written by prominent business historians, the work addresses the role of business in these two eras of globalization, examining the impact of multinationals, the formation of business groups, and relations between business and governments. It places the regional experience within the context of the worldwide history of globalization.

Chapter 9: Argentine and Chilean business in the second global economy

Geoffrey Jones and Andrea Lluch

Subjects: business and management, entrepreneurship, international business, economics and finance, economic psychology

Extract

Business in Argentina and Chile has faced sharply contrasting macro-economic environments during the second global economy, and the response of firms and entrepreneurs has also differed. As earlier chapters have shown, traditionally Argentina was wealthier than Chile. By 1913, the per capita gross domestic product (GDP) of Argentina was 50 percent higher than that of Chile. Argentina’s GDP per capita was also 75 percent of that of the United States, and higher than that of Germany or France. Table 9.1 gives comparative per capita GDP data for benchmark years after 1820. After the onset of the Great Depression, Argentina never returned to its glory days as one of the world’s most vibrant economies, but the economy was not hit as hard as some in the southern hemisphere, especially Chile, and there were still spurts of growth. Even in 1980, Argentina’s GDP per capita was second highest in Latin America after Mexico. However, from 1984 the Chilean economy began to consistently outperform Argentina. Table 9.2 compares GDP growth in the two countries.

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