The Globalization Process of Latin American Economies and Firms : Evidence from Argentina

The main motivation of this paper is to describe and assess the impact of sudden and deep macroeconomic liberalization on the industry-level and firm-level behavior of companies operating in Latin American emerging economies. The transformation of Argentina's economy during the 1991-1997 period is used as an illustration. The main contributions of the paper are: (a) to provide an objective measure of a country degree of globalization based on trade and investment flows intensity; (b) to benchmark the level and gradient of such measure for a sample of emerging economies; (c) to propose, discuss and provide preliminary confirmation for a framework of firm-level corporate change induced by the infusion of foreign capital into a transitioning country; and finally (d) to suggest the self-breeding nature of globalization processes by assessing spillover effects to neighbouring economies. The arguments may prove useful in explaining corporate investment and change in other big emerging markets like Brazil, which are currently undergoing similar transitions