In recent years, developing countries have seen the emergence of successful and innovative firms, albeit often with state support. Argentina, which faces challenges including industrial decline and macroeconomic turbulence, offers an intriguing context for studying latecomer firms, as few have managed to innovate and compete globally without significant state backing.

This book examines why and how latecomer firms facing adverse policies and hostile macroeconomic conditions can nevertheless survive, grow, and catch up with global competitors, while many other firms lag or fall further behind. It presents, on one hand, a theoretical framework that builds on contributions made by Gerschenkron (1962) and Hobday (1995) on latecomer catch-up in economic development theory, and on those by Nelson (1991, 2008) on firm-level differences in evolutionary theory; on the other, it provides a contextual framework for the catching-up experiences of firms from East Asia and Latin America, which ends with a description of Argentina’s main detrimental policy regimes over the past 50 years.

Further, the book presents an statistical analysis of manufacturing firms’ performance, along with the corporate characteristics that underlie it, within the context of Argentina’s worst economic crisis to determine which firm characteristics stood out during times of crisis (e.g. innovation and organizational capabilities). To supplement the quantitative analysis and offer additional insights, it introduces two in-depth case studies on iconic latecomer firms, TENARIS and IMPSA, which, bolstered by the examination of over nearly half a million newspaper articles, illustrate their global success amidst numerous challenges. It emphasizes the importance of long-term corporate strategy, a flexible organizational structure, and a coherent set of technological and organizational capabilities, while also addressing policy implications, making it a valuable asset for researchers, policymakers, and corporate managers alike.

This book investigates the phenomenon of latecomer firms in Argentina and their ability to thrive and catch up with global competitors despite facing adverse economic conditions. The chapter outlines three specific objectives: (1) evaluating the performance of latecomer firms in Argentina compared to other firms under similar economic conditions; (2) identifying the disadvantages faced by latecomer firms in Argentina due to macroeconomic, mezzo-economic, microeconomic, institutional, and historical factors; and (3) investigating the firm-level characteristics that enable successful latecomer firms to overcome these disadvantages.

The research begins by discussing the theoretical and contextual frameworks, drawing on the contributions of Gerschenkron and Nelson. It argues that latecomer firms in unfavorable conditions may still have strategic opportunities to catch up due to the diversity of firm forms and unique features. The specific context of Argentina is examined, highlighting four key latecomer disadvantages: distant export markets, technological backwardness, adverse macroeconomy, and corporate incoherence.

A statistical analysis of manufacturing firms’ performance during Argentina’s severe economic crisis from 1998 to 2001 is presented. The analysis utilizes the Second Innovation Survey of Argentina and explores the relationship between firm characteristics and performance indicators. The study reveals the potential resilience of manufacturing enterprises in adverse economic conditions and emphasizes the role of non-technological firm features, such as organizational innovations, in mitigating the impact of the crisis.

In-depth case studies of two successful latecomer firms in the capital goods industry, TENARIS and IMPSA, are included to complement the statistical analysis. These case studies examine the unique paths taken by these firms to survive, grow, and catch up with global competitors. The analysis explores how these firms overcame specific latecomer disadvantages and provides insights into the corporate strategies, organizational structures, and core capabilities that contributed to their differential performance.

In conclusion, this book contributes to the understanding of latecomer firms in Argentina and their ability to succeed in adverse economic conditions. The findings highlight the importance of considering both quantitative and qualitative approaches in studying latecomer firms and offer valuable insights for policymakers and practitioners seeking to support the growth and catch-up of such firms in challenging economic environments.

To conclude, the main research question of this study was why and how a latecomer firm facing adverse policy regimes in Argentina might be able to survive, grow, and eventually catch up, while many other firms lagged behind. The statistical analysis showed that innovative firms performed better than non-innovative ones during the economic crisis in Argentina. Process innovations had a greater impact on total sales than product innovations, indicating that latecomer firms prioritized the sale of cheaper goods through process innovations. Organizational innovations had a non-significant effect on firm performance, but when measured as inputs or efforts toward organizational change, they positively impacted performance. The case studies of TENARIS and IMPSA further supported these findings and highlighted the importance of long-term vision, strategic adaptability, innovative behavior, and an entrepreneurial spirit in the success of latecomer firms. TENARIS and IMPSA both followed a contrarian path, ignoring prevailing policy regimes and focusing on strategies, structures, and capabilities that allowed them to catch up with global competitors. TENARIS prioritized the sale of cheaper goods through continuous production, while IMPSA focused on small-batch production and technological modernization. Both firms overcame technological backwardness, gained access to global markets, and managed adverse macroeconomic conditions through their corporate strategies. They also maintained corporate coherence and developed specialized capabilities in their respective industries. The findings of this study have theoretical implications for understanding the strategic maneuvering of latecomer firms and the role of governments and institutions in the process of structural transformation. Methodologically, the study suggests the importance of combining quantitative and qualitative approaches to capture the impact of macro variables on firm behavior. The implications for corporate strategy and policy highlight the need for latecomer firms to be proactive and develop innovative strategies to overcome adverse circumstances. Policymakers should consider supporting successful domestic firms that have the potential to succeed in advanced export markets. Overall, this research provides insights into the factors that contribute to the success of latecomer firms in developing countries.

Papa, J. (2024) ‘The Other Latecomers’: How Latin American Firms Are Changing the Playbook on Innovation? Book Series: Management for Professionals, October 2024, ISBN 978-3-031-68422-7, Springer Nature, Switzerland, https://link.springer.com/book/9783031684227