ABSTRACT
The industrialization process did bring about an increase in the imports of capital goods, industrial raw materials, and intermediate goods. Fiscal incentives for imports of capital goods brought about a more capital-intensive and less labor-intensive industrialization process than justified by the relative domestic availability of production factors. The neoclassical position holds that customs unions like the Central American Common Market bring about high-cost industrialization behind the tariff walls. The neoclassical opinion apparently is that the political influence of the industrial bourgeoisie on the state has been too strong. Neo-Marxists maintain that most of domestic economic power is in the hands of foreign corporations. The industrial sectors that had the highest presence of foreign capital in Nicaragua were found to have the highest labor productivity and the highest import content. Foreign capital was also involved in local agricultural export production through financing that often used local banks.
