Abstract

This article examines two unexpectedly successful latecomer firms which emerged from Argentina, a crisis ridden developing economy where the vast majority of firms have languished behind the technology frontier set by global leaders. By comparing the experience of these two unusual firms with that of general trends among successful, mainly Asian latecomers, we hope to throw light on the opportunities facing other firms struggling under adverse economic and policy conditions. Through appreciative theorising we aim to incorporate some ideas from evolutionary economic theory to hopefully extend ‘normal’ (mainly Asian based) latecomer catch-up conceptualisation. The empirical findings, based on a unique and original dataset, suggest that in order to catch-up with global competitors the two latecomer firms were forced to develop strong entrepreneurial capabilities to follow a ‘contrarian path’ in terms of corporate strategy, organizational structures and technological and management capabilities, when policy incentives and macroeconomic conditions pointed them in the opposite direction. The article introduces a new framework to analyse latecomers within the macroeconomic and policy context and raises questions for future latecomer theory, policy and research on latecomer firms’ strategies under adversity.

Introduction

Historical research shows that the nations of the developing world have, not unexpectedly, been importers of modern technology for industrial development. In general, leading firms in the advanced nations produce high technology capital goods and firms in the emerging nations (sometimes called ‘latecomer firms’) use them to produce goods and services (Bell and Pavitt, 1993, Rosenberg, 1976, Vernon, 1966). Nevertheless, there is evidence of product and process innovations emerging from developing countries, as some firms and countries catch-up technologically with the advanced nations (Amann and Cantwell, 2012, Boehe, 2016, Chudnovsky et al., 1999, Dunning et al., 1998, Kashani et al., 2022, Malerba and Nelson, 2012, Petti et al., 2019, Rosiello and Maleki, 2021). In some cases, latecomers have overtaken firms in the leading nations (Whang and Hobday, 2011). Yet, most studies of latecomer catch-up focus on successful, fast growing economies from Asia (Hobday, 1995a, Hobday, 1995b, Mathews, 2006), the BRICs (Anand et al. 2021) and Multilatinas (Figuereido, 2014, Hermelo and Vassolo, 2010, Mazouz et al., 2021) albeit with some exceptions (for the case of Ghana see Li and Kozhikode, 2008). Most of these examples, especially the Asian ones benefited from positive government policies and with various degrees of institutional and state support.

A new wave of studies has focused on the entrepreneurial features of the ecosystem of firms (Alvedalen and Boschma, 2017, Mago and van der Merwe, 2023) to try and understand firms’ performance evolution (Feng et al. 2019), while others reveal the strategies adopted by catch-up firms as they approach the technology frontier (Hobday et al., 2004). However, as yet relatively little attention has been paid to the emergence of successful firms from ‘anti-entrepreneurial ecosystems’. This applies especially to countries which exhibit policy regimes which encourage rent-seeking and either extreme economic liberalization (laissez faire) or inward looking market behaviour, rather than long-term export-led growth strategies based on the capabilities of local firms

In this context, Argentina presents an interesting case. It has experienced repeated periods of industrial decline, failures in technological capability building, and severe macroeconomic crises (Schvarzer, 2000, Carrera et al., 2003, Katz, 2006). Nevertheless, as we show below, some firms have succeeded despite the problems facing the Argentinian economy and the general failure of firms to emulate the export-led success of successful latecomer firms.

To investigate this phenomenon, this study identifies and compares two ‘exceptions to the rule’ to see what can be learned from these specific latecomer firms in Argentina which succeeded not only in surviving and growing but also catching up with the global leaders, despite their evident disadvantages. The paper is structured as follows:

Section 2 presents the analytical framework based on theories of developing country catch-up starting with the pioneering work of Gerschenkron (1962) on latecomer catch-up in economic development theory. We also draw upon conceptual contributions made by Nelson, 1991, Nelson, 2008 on firm-level differences in evolutionary theory which highlight diversity and heterogeneity in terms of strategy, structure and capabilities to explain differential performance at a more granular level. When combined, these two areas of scholarship suggest that even latecomer firms that face highly unfavourable conditions may still have some strategic room for manoeuvre. The analysis draws on the context of Argentina (Lewis, 1978, Samuelson 1981, Maddison, 1995), where four latecomer disadvantages facing firms over the past 50 years or so are identified, namely: (i) market dislocation; (ii) technological dislocation; (iii) macroeconomic adversity; and (iv) corporate incoherence.

Section 3 outlines the original dataset and the case study methodology used to analyse and compare two of the most successful and innovative cases of Argentinian latecomer firms over the past 50 year or so. Section 4 describes the empirical evidence from the two case studies TENARIS and IMPSA, respectively, both of whom operated mainly in different segments of the energy sector. The first part briefly summarizes (in chronological order) paths that these two firms followed while the second part analyses in more detail relevant aspects of corporate strategy, organizational structures and core capabilities. The third part offers a brief industry level analysis showing how the two latecomer firms responded creatively to very similar adverse external circumstances. Section 5 presents a discussion of the contrarian paths taken by both firms in the context of successful and unsuccessful latecomer firms. Section 6 concludes by examining the two case studies in the light of the theories and the empirical evidence presented. The section also points to wider implications of the study for theory, policy and further research on contrarian firms’ strategy, organization and capabilities.

Papa, J. & Hobday, M. (2025) “Swimming against the Stream. Latecomers’ Contrarian Path to Catch Up under Adversity”. Journal of Engineering and Technology Management. Volume 75 January-March 2025. Elsevier B.V. Amsterdam. https://doi.org/10.1016/j.jengtecman.2024.101859