Assessing the Socio‑economic Impact of Foreign Direct Investment in Latin America and the Caribbean

A Focus on EU Investments

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11 December 2025

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4. Analysing FDI trends and impacts at the country level: The cases of Colombia, Costa Rica and the Dominican Republic

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Abstract

This chapter examines foreign direct investment (FDI) trends and development impacts, with a focus on investment from the European Union in three countries: Colombia, Costa Rica and the Dominican Republic. It draws on the analysis of Chapters 1 and 2 to zoom more in depth into FDI’s impact at the country level. For each country, the chapter reviews the evolution of FDI flows by origin, sector and subsector, and assesses their potential for economic transformation. OECD FDI Qualities Indicators are applied throughout the analysis to examine structural transformation and assess the socio-economic impacts of investments by origin, with firm-level examples illustrating practical insights and lessons learned. The analysis finally explores how EU co-operation efforts align with and complement EU investments and their impact.

4.1. Summary

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In the past two decades, foreign direct investment (FDI) to Colombia, Costa Rica and the Dominican Republic has had the potential to catalyse economic diversification, sustainability, resilience, job creation, higher quality jobs and skills development. European Union (EU) FDI has been particularly relevant in this sense. Complementary EU co-operation, which interplays with FDI and, most recently, the EU–LAC Global Gateway Investment Agenda (EU–LAC GGIA), have helped maximise the impact of FDI economic and social development. They have also strengthened an enabling environment for FDI.

Colombia, Costa Rica and the Dominican Republic were selected for their regional representativeness and the strategic weight of EU investment in their economies. Colombia is one of the largest FDI recipients in South America, with EU firms driving diversification beyond extractive industries; Costa Rica stands out in Central America for its success in leveraging FDI for advanced manufacturing, notably in medical and pharmaceutical products; and the Dominican Republic represents the Caribbean, where EU investment has been central to energy and tourism. Together, these three country cases capture the diversity of EU FDI patterns across sub-regions and sectors – energy, manufacturing, services and digital – while illustrating different development outcomes.

Colombia

FDI has been critical for Colombia’s economic development, helping the country move beyond its traditional reliance on extractives toward knowledge-intensive activities, a digital economy and the green transition. The EU is Colombia’s leading source of greenfield FDI, accounting for 27% of total greenfield FDI between 2003 and 2024, with investments concentrated in electricity (renewable energy), information and communication technology (ICT) and manufacturing. Over three-quarters of EU greenfield investments to the electricity sector in Colombia have targeted renewable energy, enhancing Colombia’s green transition. Flows have also helped diversify production and expand technology- and knowledge-intensive sectors. More efforts, however, could be made to increase FDI to research and development (R&D), which remains limited.

EU FDI has supported not only structural transformation but created quality jobs and promoted skills. The EU is the largest source of FDI-related job creation, creating nearly 120 000 jobs (36% of total FDI job creation). FDI also contributed to enhancing the workforce’s capabilities, as FDI into skills training and education increased strikingly between the last two decades. EU investment in this area substantially increased from USD 6.5 million in 2003-2013 to USD 145 million in 2014-2024. At the same time, EU investment has generated slightly lower job intensity than other partners’ investments, reflecting the EU’s focus on capital-intensive industries, such as electricity (energy). International co-operation is becoming increasingly relevant, with private finance aligning with FDI trends focusing on renewable energy and knowledge-intensive sectors, and not only promoting further FDI, but leveraging its impact.

Costa Rica

FDI has been central to Costa Rica’s development, helping position it as a high-performing economy in the region. The EU is a key partner, supporting Costa Rica’s role as a global hub for medical devices and pharmaceuticals. Alongside strong US inflows, EU investment has reinforced high-technology manufacturing and integration into global value chains (GVCs), accounting for 22% of total FDI. The bulk of EU greenfield investments are concentrated in medical equipment and supplies, and pharmaceutical production. While the United States is the leading investor in technology and knowledge-intensive (TKI) sectors, the European Union follows and has been increasing its focus on high-value-added sectors over the past two decades. Greenfield FDI in R&D in Costa Rica, however, remains minimal and is still a work in progress for all FDI origins.

FDI has created over 200 000 jobs in the past two decades, with the European Union responsible for 17% of these and ranking second after the United States (62%). Foreign firms are found to have higher wages, stronger productivity, greater export intensity and a slightly more skilled workforce than domestic firms. Foreign firms, provide more training opportunities than domestic ones, and the EU, in particular, leads in FDI to skills training and education, reinforcing a virtuous cycle in which Costa Rica’s skilled workforce attracts investment and investment further strengthens skills. Looking ahead, international co-operation will be crucial to sustain innovation and technological upgrading. Mobilised private finance, historically limited, has grown recently and is expanding across a wider number of sectors, although it remains concentrated in a few when it comes to value.

Dominican Republic

FDI has played a stabilising role in the Dominican Republic, with foreign capital – particularly from the EU – supporting resilience and growth. Over 2003‑2024, the EU was the largest greenfield investor, accounting for 33% of total inflows, concentrated in tourism and electricity. EU investors have been key drivers of renewable energy, helping diversify the energy matrix and align investment flows with sustainable development priorities. Yet, greenfield FDI in technology- and knowledge-intensive sectors, including R&D, remains limited.

Greenfield FDI has generated significant employment, with the EU as the main contributor. Between 2014 and 2024, FDI created nearly 61 000 jobs – a 50% increase from the previous decade – with EU companies accounting for 35% of FDI-related jobs. Job intensity remains slightly lower than for other investors due to EU concentration in less labour-intensive sectors, such as renewable energy. Still, foreign firms are shown to deliver higher labour productivity, higher wages, higher export intensity than domestic firms, mitigating some structural weaknesses of the local labour market. EU FDI jobs are concentrated in sectors with higher wages, labour formality and those that are male dominated. Yet, they are also concentrated in sectors which have lower female labour informality and pay higher quality wages to women.

International co-operation has amplified FDI’s impact. While mobilised private finance is still emerging, official development assistance (ODA) devotes an important share to the energy sector. It has the potential to further enhance the quality and quantity of a FDI-supported green transition. ODA for skills, training and education has been overwhelmingly driven by the EU and its institutions in the Dominican Republic, accounting for nearly all the USD 35 million allocated between 2014 and 2023.

4.2. Colombia: FDI trends and impacts, with a focus on EU investments

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4.2.1. The role of FDI in enhancing production structures and innovation in Colombia

FDI remains central for Colombia’s economy, shifting beyond resources towards knowledge-intensive and sustainable sectors

FDI is a strategic component of Colombia’s economic development. Colombia was the fourth largest recipient of FDI in South America between 2013 and 2023, with 7% of all FDI inflows to the region after Brazil (close to 40%), Mexico (21%) and Chile (9%) (Chapter 1). FDI in Colombia grew relative to GDP and in per capita terms between 2003-2023. Colombia’s FDI stock has risen steadily over the past decade, above LAC and OECD averages, though the FDI-to-GDP ratio has plateaued since peaking at 78% in 2020. Per capita inflows have converged toward regional and OECD levels in recent years, but approaching values recorded in 2003. This reflects investor confidence but also suggests missed opportunities to further leverage FDI for growth (UNCTAD, 2025[1]).

Greenfield FDI in LAC has shown signs of diversification beyond extractives over the past decade (Figure 4.1). ICT rose from 9% of total FDI (USD 5.7 billion) in 2003-2013 to 34% (USD 8.3 billion) in 2014-2024, while electricity expanded from 5% (USD 2.8 billion) to 19% (USD 6.3 billion). Mining and quarrying saw a sharp drop from 40% (USD 24 billion) to less than 9% (around USD 3 billion). This reflects Colombia’s recent policy shift to phase out new oil and gas exploration in support of its greener economy agenda and the Fossil Fuel Non-Proliferation Treaty, which it joined in 2023, becoming the first significant oil exporting country to join this global alliance (Osborn, 2024[2]). Manufacturing also contracted from nearly USD 20 billion to USD 7 billion, though it still represents a notable share (21%). Overall, the most dynamic growth in new projects has come from ICT and electricity, signalling a broader shift toward digital and sustainable sectors.

Figure 4.1. Electricity, and information and communication experienced a large increase in the last decade, while FDI to mining and quarrying grew at a much slower pace
Copy link to Figure 4.1. Electricity, and information and communication experienced a large increase in the last decade, while FDI to mining and quarrying grew at a much slower pace

Greenfield FDI to Colombia, by sector, 2003-2024

Renewable energy and data processing – within the ICT sectors – recorded large increases in greenfield FDI share over the past decade. Renewable energy, especially solar, grew strongly, rising from zero projects in 2003-2013 to nearly 10% of total greenfield FDI in 2014-2024, while oil and gas dropped from almost 22% to 7% in the same period (Figure 4.2). This trend aligns with Colombia’s National Reindustrialisation Strategy and the country's efforts to diversify its economy and attract investment in areas such as renewable energy, technology and services (CONPES No. 4129, 2023[4]).

Figure 4.2. Renewable energy and data processing recorded large increases in greenfield FDI share
Copy link to Figure 4.2. Renewable energy and data processing recorded large increases in greenfield FDI share

Greenfield FDI to Colombia, by sector and subsector, % of total greenfield FDI

Colombia has emerged as one of the leading destinations for brownfield FDI in LAC, ranking among the top countries in both the value and number of mergers and acquisitions (M&As) in recent years. The country recorded several landmark deals in retail, food processing, transportation and pharmaceuticals, with overall M&A activity increasing significantly in 2024 (ECLAC, 2024[5]). Between 2018 and 2024, M&As were concentrated in ICT, retail trade and vehicle repairs, and manufacturing, which together accounted for over 60% of total transaction values, underscoring their strategic weight in Colombia’s investment landscape. In 2024, the number of cross-border M&A transactions in Colombia increased by 18% and in value by 32% compared to the previous year (Baker McKenzie, 2025[6]). ICT and manufacturing – especially pharmaceuticals – attract both brownfield and greenfield FDI, reflecting their dynamism and knowledge intensity. By contrast, financial services are driven mainly by acquisitions, while energy and infrastructure increasingly benefit from greenfield projects aligned with Colombia’s transition priorities. This dual dynamic underscores how FDI supports both consolidation in mature sectors and transformation in emerging ones. The EU is an important contributor to this transformation as it holds the largest share of brownfield FDI value in the ICT (10.4%), followed by the United States (6.6%). In manufacturing, the United States leads with a share of 6.6% of total transaction values, while the European Union comes in second at 5% (LSEG, 2025[7]).

The EU leads in greenfield FDI to Colombia and its FDI has been a driver of renewable energy and digital connectivity

The EU has been the largest source of greenfield FDI to Colombia in the past two decades. EU investments accounted for 27% of total greenfield FDI between 2003 and 2024, exceeding USD 25 billion in value. LAC ranked second (21%), followed by the United States (18%) (Financial Times, 2025[3]). Notably, China was the only source of greenfield FDI to Colombia that increased in absolute terms between the past two decades, although comparably low (USD 1 billion (1%) in 2014-2024), showing the increasing interest of China in investing in LAC and its targeted investments in Colombia (Ray, 2024[8]). Over the past two decades, EU FDI in Colombia has been significant in energy, manufacturing and ICT, (Chapter 1) (Figure 4.3).

EU greenfield investment between 2014 and 2024 concentrated in electricity sectors, with almost 70% of total investments received by Colombia in electricity, maintaining the EU’s position as the principal investor from the previous decade. The EU also stands out as the main investor in manufacturing (36%) as well as transportation and storage (30%), where the EU’s share increased compared to the previous decade. In 2014-2024 LAC contributed the most towards the construction sector (50%), followed closely by the EU, which more than doubled its share in this sector. Lastly, the United States invested the largest share in ICT (43%), after almost tripling its share of investment in it compared to the previous decade. The EU had an important presence in this sector over the 2003-2013 decade and remains the second largest investor (Figure 4.3).

Figure 4.3. The EU is the main investor in electricity, with an increased role in transportation and construction
Copy link to Figure 4.3. The EU is the main investor in electricity, with an increased role in transportation and construction

Greenfield FDI, by origin and sector, % of total FDI by sector, 2003-2024

The EU FDI has contributed to the shift toward the green energy transition in one of the five strategic sectors of Colombia’s National Reindustrialisation Policy (Departamento Nacional de Planeacion, 2024[9]). This trend reflects a broader regional re-orientation of EU investment in LAC, thanks to the focus of the EU–LAC GGIA Investment Agenda (EU–LAC GGIA). EU FDI in energy grew by over 210% in 2014-2024 and substantially shifted towards renewables, positioning the EU as the major driver of renewables’ growth and the green transition in the sector. The share of EU greenfield FDI in renewable energy nearly doubled from 13% to 28% over the past decade (Chapter 1). Between 2014 and 2024, over three-quarters of EU greenfield investments to the electricity sector in Colombia targeted renewable energy, underscoring FDI’s role in advancing sustainability. Solar power attracted the largest share as FDI to it grew from zero to more than USD 2 billion compared to the previous decade, followed by wind and hydroelectric projects (Financial Times, 2025[3]). Despite this strong contribution to clean energy, the EU was also, however, the only greenfield investor to finance non-renewable electricity generation (oil, coal and gas) during the same period, with USD 1.2 billion invested – nearly 10% of its total greenfield commitments in Colombia (Figure 4.4). This could be explained by the historical footprint of European energy firms in Colombia, classification effects in investment data that do not account for hybrid energy plans and the inclusion of commitments pre-dating the EU’s policy re-orientation toward sustainable infrastructure under the EU–LAC GGIA.

Figure 4.4. EU FDI greenfield across sectors and subsectors, 2014-2024
Copy link to Figure 4.4. EU FDI greenfield across sectors and subsectors, 2014-2024

Given the country’s untapped energy potential, the EU’s focus on renewable electricity investments is important to Colombia’s commitments to greenhouse gas emissions (GHG) reduction by 2050 and electricity expansion plans. Despite a large share of renewables in electricity generation – 74.9% in 2022 – over 98% of this comes from hydropower (IEA, 2025[10]). In contrast, renewables like solar photovoltaic (_PV) and wind remain marginal, accounting for less than 2% of the national electricity mix, making the sector vulnerable to climate variability. The expansion of solar_PVand wind sources could also provide a clean and efficient solution for Colombia's non-interconnected zones (NIZs), places that, due to their geographical location, cannot be connected to the national electricity grid. NIZs cover only 4% of the population but over half the national territory and currently rely on diesel, which is both polluting and expensive (OECD, 2023[11]).

Within the ICT sector, the EU has focused its investments on digital connectivity and other sophisticated services. Around 9% of all EU investments to Colombia between 2014-2024 were concentrated on key areas for the expansion of digital connectivity. This includes wireless and wired telecommunication carriers and data processing, and hosting and related services. These investments are instrumental in unleashing Colombia’s connectivity potential and closing digital divides. They contribute to realising Colombia’s aims to connect 85% of its population by 2026 under the ConectaTIC 360 plan, part of its National Digital Strategy (ColombiaTIC, 2023[12]). The country has presented some of the highest growth rates of fixed and mobile broadband subscriptions among OECD and LAC countries since the early 2010s. It has also made progress in closing the digital divide, achieving a 9% reduction between 2018 and 2022 (ColombiaTIC, 2023[12]). Nevertheless, it still has the lowest fixed and mobile penetration rates in the OECD, with a lower-than-average share of fibre connections and broadband speed than the OECD group (OECD, 2019[13]). The expansion of digital infrastructure and services could help address these gaps, while providing positive spillovers for the rest of the economy by enabling innovation and productivity gains at the firm level.

EU FDI has significantly contributed to the expansion of technology- and knowledge-intensive sectors

Technology- and knowledge-intensive sectors (TKI) are defined by their reliance on scientific and technical expertise, R&D, innovation and highly skilled labour, and are key drivers of innovation, productivity and long-term economic growth. Greenfield FDI to TKI in Colombia increased from USD 7.8 to 11.3 billion (more than 40% increase) between 2003-2013 and 2014-2024. High-tech knowledge-intensive services are the most prominent subsector in Colombia. This contrasts with the overall LAC trend, where the focus is on medium-tech manufacturing. Over the past two decades, the European Union and the United States have been the main sources of TKI investment in Colombia. While the European Union led in 2003-13 with USD 3.1 billion, followed by LAC (USD 2 billion), the United States surged in 2014-2024 to become the principal investor, with its share of greenfield FDI in TKI rising from 20% to over 30%. The EU’s share slightly declined from 39% to 22%, underscoring the need to reinforce its role in this high-value-added sector (Figure 4.5).

Figure 4.5. Greenfield FDI in TKI sectors in Colombia is increasing
Copy link to Figure 4.5. Greenfield FDI in TKI sectors in Colombia is increasing

Greenfield FDI, by origin and sector, 2003-2024

EU and LAC investors concentrate on highly productive sectors

While EU FDI in technology and knowledge-intensive sectors (TKI) has declined relative to other partners, the EU continues to lead in sectors with high labour productivity, underlining its role in anchoring value-added activities in the region. Greenfield FDI from both the EU and LAC is concentrated in sectors with above-average labour productivity, while investment from other origins is more prevalent in less productive sectors (Figure 4.6). China shows the highest concentration in low-productivity activities, which could be explained by the fact that 58% of its FDI is directed to the transportation sector.

EU greenfield FDI is concentrated in relatively labour-productive sectors – electricity (40%), manufacturing (20%) and ICT (14%) of total EU FDI – a positive outcome given that foreign investment in developing countries often targets lower-productivity sectors. However, this largely reflects the capital-intensive nature and relatively small workforces of these sectors. This limits broad productivity spillovers across the economy as limited employment and linkages with other sectors reduces diffusion of skills, technology and practices (Chapter 1). Still, such investments contribute to improved energy access and wider Internet diffusion, critical priorities advanced today by the EU–LAC GGIA.

Figure 4.6. Greenfield FDI of EU origin is concentrated in sectors with higher labour productivity
Copy link to Figure 4.6. Greenfield FDI of EU origin is concentrated in sectors with higher labour productivity

However, there is space for increased outcomes in productivity as FDI to R&D remains limited and decreasing. A survey from 2023 of companies operating in Colombia indicates that there is no statistically significant difference between foreign and domestic companies’ investment in R&D or process innovation (World Bank, 2023[15]). These results are consistent with a previous survey in 2016, which showed that approximately the same proportion of domestic and foreign firms had a funded R&D programme: 17% of domestic firms reported having such programmes compared to 16% of foreign firms (Fedesarrollo, 2016[16]).

Greenfield FDI to R&D activities in Colombia accounts for less than 2% of total greenfield between 2003 and 2024. Total investment fell from USD 1.4 billion in 2003-2013 to USD 690 million in 2014-2024 (Figure 4.7). In absolute terms, the European Union was the main R&D investor, though its investment declined markedly over time. Conversely, U.S. investment in R&D increased over the last two decades, reaching more than 50% of total R&D investment in 2014-2024. Despite the low level of greenfield FDI targeting R&D activities, foreign firms can still positively influence technological change and innovation in Colombia through the transfer of superior parent-company technologies. This highlights the need for targeted policies to attract R&D-focused FDI and strengthen Colombia’s innovation capacity.

Figure 4.7. R&D activities account for 2% of total greenfield FDI
Copy link to Figure 4.7. R&D activities account for 2% of total greenfield FDI

Greenfield FDI in R&D activities, 2003-2013 and 2014-2024

4.2.2. The role of FDI in creating (quality) jobs and promoting skills in Colombia

The EU leads in job creation in Colombia, job intensity varies across sectors

Over the past two decades, greenfield FDI is estimated to have generated around 320 000 jobs in Colombia, the number of jobs growing almost 50% between the past two decades. Between 2003 and 2024, Colombia ranked third in greenfield FDI-related employment in LAC, accounting for 7% of total jobs created – well behind Mexico (46%) and Brazil (16%) (Chapter 2). The EU was the largest source of job creation in Colombia, creating nearly 120 000 jobs (36%), followed by the United States with over 80 000 (25%) and LAC investors with about 60 000 (18%). FDI-related job creation increased across all investor origins between 2003-2013 and 2014-2024 except for the United Kingdom (UK) and other investors (Figure 4.8, Panel A).

Job Intensity in Colombia increased substantially, from 2200 in 2003-13 to 5700 in 2014-24 jobs per billion USD invested. FDI of EU origin created more jobs per billion USD invested than investments from all origins in both time periods. . These figures, however, should be interpreted with caution, as they are derived from greenfield FDI announcements that may not fully materialise (Figure 4.8, Panel B).

Figure 4.8. Th EU stands first in total job creation in Colombia
Copy link to Figure 4.8. Th EU stands first in total job creation in Colombia

FDI jobs are heavily concentrated in the administrative and support service, and ICT sectors, accounting for 21% and 22% of total FDI generated jobs, respectively during the period 2014-2024. This is followed by manufacturing, which accounted for 18%. Jobs directly created by EU greenfield investments are primarily concentrated in administrative and support services (24.7%), manufacturing (18%), ICT (17.3%) and construction (15.2%), mirroring the sectoral patterns observed across the broader pool of all foreign investors within Colombia (Figure 4.9, Panel A). The administrative and support services sector is the most job-intensive for greenfield investment, where the EU shows a higher job intensity than other countries. Between 2003-13 and 2014-2024, the share of EU-generated jobs notably increased in the construction and ICT sectors, while job creation declined in administrative and support services, electricity, financial and insurance activities, and manufacturing (Figure 4.9, Panel B). Renewable energy greenfield FDI-related jobs created by EU investors more than doubled between the two last decades.

Figure 4.9. EU-generated jobs are concentrated in the administrative and support services, ICT, manufacturing and construction sectors
Copy link to Figure 4.9. EU-generated jobs are concentrated in the administrative and support services, ICT, manufacturing and construction sectors

Finally, job creation in digital sectors (digital services, electronic components, ICT goods and telecommunications) has risen sharply, in line with regional trends. Between 2014 and 2024, these sectors accounted for 20% of all greenfield FDI-related jobs in LAC, underscoring their growing role as a source of employment (Chapter 2). Between the last two decades, job creation stemming from greenfield FDI in digital sectors almost doubled, rising from 25 000 to almost 46 000 (Figure 4.10). In 2014-2024, jobs in the digital sectors accounted for approximately one-quarter of total FDI-related jobs, reflecting more developed digital ecosystems in the country. EU investments were key to this growth, with digital sector jobs rising from 4 600 to 13 000, making the European Union the second-largest source after the United States. Most of these new jobs were created in digital services, while growth within ICT goods, telecoms and electronic components remained limited.

Figure 4.10. The U.S. and EU lead in job creation within digital sectors
Copy link to Figure 4.10. The U.S. and EU lead in job creation within digital sectors

Greenfield FDI jobs in digital sectors, by origin country, 2003-2013 and 2014-2024, thousands of jobs

FDI from EU and LAC origin is mildly concentrated in sectors with higher wages

EU greenfield FDI in Colombia is mildly concentrated in higher-wage sectors, while LAC investors show an even stronger bias toward above-average wage activities. By contrast, the United States, the United Kingdom, China and others invest more in lower-paying sectors, with China displaying the strongest bias. This reflects the regional trend: EU FDI in LAC tends to be associated with a higher share of quality jobs – wages above the national average – and fewer low-wage positions. In Colombia, nearly 40% of workers in EU FDI sectors earn above-average wages compared to about 30% in other sectors (Chapter 3). The EU’s mild positive premium reflects a dual concentration in both lower-paying sectors, such as manufacturing (average annual salary of USD 4 900) and construction (USD 3 500), and higher-paying sectors like ICT (USD 10 600) and manufacturing (USD 10 200) (Figure 4.11).

Figure 4.11. FDI originating from the LAC is mildly concentrated in higher paying sectors
Copy link to Figure 4.11. FDI originating from the LAC is mildly concentrated in higher paying sectors

This concentration of EU FDI in sectors with higher salaries is complemented by a wage premium, as foreign firms are found to have larger costs per employee than domestic ones (Chapter 3). In Colombia, the sectors where most of EU jobs are created are shown to have not only higher wages, but also higher wage quality and labour formality. Workers in sectors with a concentration of EU FDI jobs are also more likely to have a permanent and written contract, receive pension contribution and health insurance, have higher educational attainment as well as are predominantly male, compared to the other sectors. (Chapter 3).

FDI in Colombia provides more training than domestic firms

Greenfield FDI from all origins into education and training activities in Colombia grew significantly over the last decade. Investment of EU origin in this area substantially increased in volume from USD 6.5 million in 2003-2013 to USD 145 million in 2014-2024 (Figure 4.12, Panel A), ranking as the second largest investor after LAC in the latter period. This nominal shift also corresponds to a substantial increase in the share of investments allocated to education and training, rising from just 0.04% to 1.2% between these time periods for the EU, demonstrating European enterprises’ growing focus on enhancing employee capabilities (Figure 4.12, Panel B). European companies from the energy and digital sectors interviewed for this report provide illustrative examples of this trend (Box 4.1).

Figure 4.12. EU investments to education and training increased significantly in the last decade
Copy link to Figure 4.12. EU investments to education and training increased significantly in the last decade

Greenfield FDI to education and training activities in Colombia

Box 4.1. FDI is driving skills development in Colombia’s renewable energy and digital connectivity

Copy link to Box 4.1. FDI is driving skills development in Colombia’s renewable energy and digital connectivity

European firms in Colombia’s renewable energy and digital connectivity sectors are actively contributing to workforce development through structured and internationally integrated training programmes.

EDF Renewables, a French company in Colombia since 2019, has established a comprehensive training strategy for its 37 local employees. This includes formal partnerships with local universities, such as Universidad Javeriana and Universidad del Rosario, to offer certified training programmes. The firm also engages in international environmental training networks and operates a talent identification programme, enabling selected employees to attend training abroad, including at its headquarters in Paris.

Hispasat, the Spanish satellite telecommunications operator, has maintained a subsidiary in Colombia since 2013. It currently provides connectivity services at more than 700 sites across departments such as Amazonas, Boyacá and Guainía. The company employs 150 people in Colombia and focuses training efforts on technical and operational skills, complemented by modules on leadership and management. Training is also extended to clients and their support teams, with sessions delivered both locally and from Spain.

These cases illustrate how foreign investors can enhance human capital development in host countries, not only by upskilling their own workforce, but by generating positive spillovers across the value chain through the training of client and partner organisations.

Source: Based on interviews with (Lebrun, 2025[17]) and (Aldana, 2025[18]).

Main investors in Colombia operate in sectors with lower female employment, but foreign companies hire a higher share of female employees

FDI from the European Union, the United States, LAC and other investment origins concentrate in male-dominated sectors with lower concentration of female employment (Figure 4.13). This aligns with the regional trend in LAC of greenfield FDI predominantly in male-dominated sectors: from 2014 to 2023, over 70% of greenfield FDI in the region was directed into sectors with relatively low female participation (Chapter 2). EU FDI flows to Colombia are heavily focused in sectors with low shares of female employment, while US investments are only mildly focused in these sectors. In contrast, FDI originating from the United Kingdom and China concentrates in sectors with higher shares of female employees, relative to the overall economy. This finding should be interpreted with caution, however, as FDI concentration in highly feminised sectors does not indicate its contribution – positive or negative – to gender equality; further analysis is needed on participation, working conditions and social protection.

The latest official records show that between December 2024 and February 2025, the gender gap in employment stood at 25 percentage points (DANE, 2025[19]). Men reported an employment rate of 70% compared to only 46% for women. Meanwhile, the unemployment rate for women (14%) was nearly double that of men (8%). Female employment in Colombia is concentrated in high-skilled service sectors, such as public administration, education, health, finance and professional services. Participation is notably lower in medium- to low-skilled sectors, such as construction or subsectors of manufacturing, where EU FDI is most prevalent.

Figure 4.13. EU FDI is concentrated in sectors with lower female employment
Copy link to Figure 4.13. EU FDI is concentrated in sectors with lower female employment

Foreign companies in Colombia employ a slightly higher share of women than domestic firms, with the difference being statistically significant (Chapter 3). Although the gap is modest, survey data confirm that foreign-owned firms have a higher proportion of female employees. This may be partly explained by the application of diversity and inclusion policies in multinational subsidiaries. European companies reported the adoption of gender-related policies, including initiatives on corporate culture and training. However, they indicated that no specific gender quotas or targets are mandated with respect to female employment (Chapter 5).

4.2.3. International co-operation enhances FDI and its impact in Colombia

International co-operation is essential not only to attract FDI but to maximise its economic and social development impact. In Colombia, it can help to further tackle structural barriers. Low export diversification, limited skills, high poverty and inequality, widespread informality and elevated risk perception currently constrain investment (OECD, 2024[21]; 2024[22]) . The interplay between FDI and development co-operation is evolving, with the EU playing a central role in this shift (Da Costa, 2025[23]). With the EU–LAC GGIA at the forefront of this shift, co-operation is increasingly focused on mobilising private capital at scale to meet expanding development needs. Partners are deploying catalytic instruments (e.g. guarantees, blended finance, equity co-investments, syndicated loans) together with policy and project preparation support to de-risk projects, crowd in institutional investors and strategic firms, and align finance with national priorities (OECD et al., 2019[24]; 2024[22]; European Commission, 2025[25]). In parallel, co-operation can strengthen the enabling environment by supporting legal and regulatory reforms, enhancing skills and providing training to build a workforce capable of attracting and sustaining high-quality investment.

Mobilised private finance for development in Colombia is increasingly important, with a focus on banking and financial services, followed by energy

Mobilised private finance for development directed to production sectors in Colombia has generally outweighed Official Development Assistance (ODA) as a share of Gross National Income (GNI) over the past decade (Figure 4.14). Colombia’s reliance on mobilised private finance for development stands out compared with LAC as it has played a relatively larger role in the country than in the region. The most prominent leveraging mechanisms by value in Colombia are guarantees (39%), syndicated loans (31%) and shares in collective investment vehicles (CIV) (13.5%) (OECD, 2025[26]).

The growth of mobilised private finance for development is reflected in absolute and relative terms, and flows have also diversified, now encompassing a wider range of sectors. In 2012, only three sectors in Colombia received mobilised private financing. In 2023, the number of sectors increased to 13 (OECD, 2025[26]). During 2014-2023, mobilised private finance targeted banking and financial services (43%), followed by energy (21%), and transport and storage (18%) (Figure 4.15). The share of mobilised private finance aimed at banking and financial services is larger in Colombia than the LAC, illustrating how development efforts can support knowledge-intensive, high-value-added activities.

Figure 4.14. Official flows to production sectors in Colombia and LAC as % of GNI, 2014-2023
Copy link to Figure 4.14. Official flows to production sectors in Colombia and LAC as % of GNI, 2014-2023

Figure 4.15. Mobilised private finance is concentrated in banking and financial services, followed by energy
Copy link to Figure 4.15. Mobilised private finance is concentrated in banking and financial services, followed by energy

Mobilised private finance for development, by sector, in Colombia and LAC, 2014-2023

Moreover, while Colombia received relatively less mobilised private finance for development in the energy sector than LAC, 82% of it was dedicated to renewable energy generation and none towards non-renewables, reflecting development efforts in the country’s green transition and alignment with FDI sectoral trends (OECD, 2025[26]). An optimised mobilisation agenda in Colombia can further steer FDI towards low-carbon and knowledge-intensive activities, foster R&D, deepen local linkages and small- and medium-sized enterprise (SME) participation, and deliver measurable development additionality.

ODA from EU to Colombia aligns with FDI focus on energy, and supports skills

Beyond direct mobilisation, ODA can play a crucial role by strengthening the foundations of productive sectors and thereby indirectly enhancing their attractiveness to foreign investors. ODA can support infrastructure development, regulatory improvements, as well as training and skills formation, all of which are crucial for creating an attractive investment climate (Kimura and Flood, 2025[29]). EU ODA to Colombia aligns closely with EU FDI priorities, particularly the green transition. Between 2014 and 2023, 36% of production-sector ODA went to energy – 27% of it to renewables – followed by transport (26%) and agriculture (13%) (OECD, 2025[28]). Unlike FDI, no funds were allocated to non-renewable energy. Since 2019, EU ODA has increasingly focused on energy, while support for agriculture and forestry has declined (Figure 4.16).

Figure 4.16. EU ODA to production sectors is concentrated in energy
Copy link to Figure 4.16. EU ODA to production sectors is concentrated in energy

ODA from EU members and institutions disbursed to production sectors in Colombia, 2014-2023

Skills development and training is another key channel through which ODA can promote sectoral transformation, enhance employability and productivity, and increase investment attractiveness. Between 2014 and 2023, the European Union was a leading donor to skills development in Colombia (USD 29 million) after the United Kingdom, channelling over half of its ODA in this area to vocational training to strengthen workforce capacity and investment attractiveness. Specifically, 54% of EU ODA to skills were directed towards vocational training, reflecting an emphasis on professional capacity-building (OECD, 2025[28]).

EU partnership supports investment and development strategies in Colombia

Colombia’s reform agenda is ambitious, seeking to raise living standards and promote social justice through economic diversification, energy transition and regional convergence (OECD, 2024[21]). The EU, through the EU–LAC GGIA, supports priority areas, such as climate and energy, connectivity, digitalisation and transport. These are also core pillars of Colombia’s National Development Plan (NDP) 2022-2026, which places territorial development at the centre of a decarbonised, biodiversity-based and inclusive economy. Clean energy is a cornerstone of this strategy, reinforced in the National Energy Plan 2024-2054, and in line with the legislated target of net-zero emissions by 2050 (UPME, 2025[30]). EU engagement in climate and energy spans sustainable finance taxonomy, access to finance via the Global Green Bonds Initiative, renewable energy, wastewater management, green hydrogen and nature-based solutions (European Commission, 2024[31]). These efforts complement the growing weight of EU FDI flows in Colombia’s renewable energy sector, amplifying their development impact (Financial Times, 2025[3]).

The EU’s Multi-Annual Indicative Programme 2021-2027 for Colombia provides a framework to scale up investment, particularly through blending and guarantees under the European Fund for Sustainable Development Plus (EFSD+) to mobilise financing for green infrastructure and a cleaner energy mix (European Commission, 2021[32]). Recent operations include a USD 300 million loan from the European Investment Bank (EIB), Enel S.p.A. Group, and Italian insurance and financial group SACE to expand grids, renewable generation and e-mobility. Blended finance operations led by Climate Fund Managers have catalysed private investment in clean energy and de-risked projects, including the PCH Nare and Pétalo del Norte I power plants (Edwards, 2025[33]; CFM, 2025[34]).

Beyond financing and risk mitigation, EU programmes such as Euroclima+ strengthen the enabling environment in Colombia by advancing regulatory frameworks and sectoral programmes on energy efficiency, such as light-duty vehicles standards and vehicle labelling, and contributing to the design of long-term sectoral programmes on energy efficiency in industry (Euroclima, n.d.[35]). Additionally, Euroclima+ backs the Colombian Strategy for Low Carbon, Adapted and Resilient Development (ECDBCAR), including actions related to technology transfer and climate change adaptation (Euroclima, n.d.[35]). Looking ahead, bioenergy – explicitly prioritised in Colombia’s NDP – offers a major opportunity to accelerate the clean energy transition. Leveraging de-risking tools, blended finance and stronger partnerships with financial stakeholders can attract high-quality FDI in this technologically intensive sector (OECD, 2022[36]).

As a leading investor in Colombia’s telecommunications sector, the EU plays a key role in advancing digital connectivity, fostering further investments and enhancing its impact. Through the EU–LAC GGIA, it is supporting Colombia’s ConectaTIC 360 plan – part of the National Digital Strategy – by mobilising investment, fostering regulatory alignment and promoting sustainable development in digital infrastructure. Although still at an early stage, co-operation is taking shape around three pillars: i) expanding access to capital and resources; ii) strengthening local capacities for sustainable Internet use; and iii) promoting policy harmonisation and regulatory alignment. Concrete initiatives include mobilising private investment via the Development Bank of Latin America and the Caribbean (CAF), with a focus on fixed broadband for households, firms and public institutions. This also includes the “Connecting the Unconnected” programme, which will deploy up to 12 community networks, train 800 people and create a policy dialogue on long-term rural connectivity, as well as policy exchange on emerging regulatory frameworks for artificial intelligence (OECD, forthcoming[37]).

4.3. Costa Rica: FDI trends and impacts, with a focus on EU investments

Copy link to 4.3. Costa Rica: FDI trends and impacts, with a focus on EU investments

4.3.1. The role of FDI in enhancing production structures and innovation in Costa Rica

FDI in Costa Rica is above LAC and OECD averages, and has driven manufacturing development

FDI has been a central driver of Costa Rica’s development, underpinning growth, employment and competitiveness. The country’s strategy – anchored in trade and foreign investment – has prioritised global market integration as a core engine of growth (OECD et al., 2025[38]). This structural relevance is reflected in FDI’s high share of GDP, consistently above both Latin American and OECD averages since the early 2000s. Per capita inflows have also outperformed the regional average and, in recent years, even surpassed the OECD average. Despite some pro-cyclical fluctuations, FDI expanded at an annual average of 9.5% between 2005 and 2023, well above Costa Rica’s GDP growth of 3.8%, reflecting its growing role in the country’s long-term economic trajectory (Central Bank of Costa Rica, 2025[39]).

Greenfield FDI in Costa Rica has expanded rapidly, averaging 64% annual growth between 2003 and 2024 compared to 9.5% for overall FDI (Central Bank of Costa Rica, 2025[39]). Manufacturing has consistently dominated, rising from 35% of greenfield inflows in 2003-2013 (USD 3.53 billion) to 51% in 2014-2024 (USD 6.7 billion) (Figure 4.17). Within manufacturing, medical equipment and supplies grew from under 5% (USD 478 million) to nearly 17% (USD 2.17 billion) of greenfield FDI. Manufacturing of pharmaceutical preparations grew from below 0.5% (USD 38 million) to 6% (USD 725 million), alongside gains in semiconductors and electromedical apparatus (Figure 4.18).

Figure 4.17. FDI to manufacturing grew substantially over the past two decades
Copy link to Figure 4.17. FDI to manufacturing grew substantially over the past two decades

Greenfield FDI to Costa Rica, by sector

These shifts toward more technology- and skill-intensive manufacturing reflect Costa Rica’s production development policy. It prioritises advanced manufacturing, particularly in high-tech production such as semiconductors and life sciences (medical technology and pharmaceuticals), knowledge-intensive services, including digital technologies and corporate services, all centred on high skills and innovation, and health and well-being. This policy underpins diversification and technological upgrading, as well as increased investment in critical infrastructure supporting Costa Rica’s digital transition (PROCOMER, n.d.[40]).

Costa Rica’s ability to attract FDI is driven by advanced manufacturing capabilities, a highly skilled talent pool and strong innovation capacity, complemented by political and economic stability, a well-defined regulatory framework – with adherence to international high standards on quality and safety – and intellectual property protection. Sustainable policies and the country’s strategic location – particularly relevant in the context of nearshoring – further enhance its attractiveness by providing easy access to North and South American markets (LATAM FDI, 2024[41]). Significant public efforts have also supported FDI attraction, including investments in trade-related infrastructure, support to free trade zones and the establishment of CINDE, Costa Rica’s former investment promotion agency (Mora-García and Pearson, 2024[42]). Together, these factors have positioned Costa Rica as a global hub for medical device manufacturing.

Between 2018 and 2024, mergers and acquisitions (M&As) in Costa Rica were heavily concentrated in the ICT, manufacturing, and retail trade and vehicle repair sectors. Brownfield FDI in the ICT sector accounts for a larger share of total investment than greenfield FDI in the same sector, reflecting investor preference for acquiring existing firms with established market presence, capabilities and technological assets. In contrast, the manufacturing sector has a stronger share of greenfield FDI relative to brownfield investments. This indicates that investors in this sector are more focused on establishing new operations, potentially to take advantage of emerging opportunities in Costa Rica’s medical technology and pharmaceutical sectors’ growing dynamism (LSEG, 2025[7]).

Figure 4.18. Medical equipment manufacturing recorded the largest increase in greenfield FDI share
Copy link to Figure 4.18. Medical equipment manufacturing recorded the largest increase in greenfield FDI share

Share of total greenfield FDI to Costa Rica, by sector and subsector, 2003-2013 and 2014-2024

The U.S. drives greenfield FDI in Costa Rica, accounting for nearly half of total inflows

The United States is the main source of greenfield FDI in Costa Rica, displaying outstanding growth in the past two decades. Investments of US origin amounted to almost USD 11 billion, equal to 46% of total FDI greenfield during the period 2003-2024, with investments almost doubling between the periods 2003-2013 and 2014-2024. The EU ranks as the second largest, with 22% of total FDI (USD 5 billion) and the LAC region ranked third with 13% (nearly USD 3 billion). UK and Chinese investments remained comparatively low, under 1 USD billion (at 4% and 3%, respectively) (Financial Times, 2025[3]). Between 2003-2013 and 2014-2024, EU investments in the manufacturing sector almost doubled, from USD 512 million to USD 1.03 billion, much like greenfield FDI into information and communication, which rose from USD 79 million to USD 169 million. The United States invested heavily into manufacturing, surging from USD 2 billion to more than USD 4 billion in the same time frame, with significant investment increases in the information and communication sector as well.

The United States was the main source of greenfield FDI in Costa Rica’s core sectors in 2014-2024, accounting for around 60% of FDI in manufacturing and 48% in ICT, maintaining its dominant position in both sectors from the previous decade. In manufacturing, the EU was the second largest investor, contributing 15% of sectoral investments in 2014-2024, while in ICT, investors from LAC ranked second, with 36%, followed by the EU, with 10%. In the same time period, the EU was the principal investor in transport and storage, with 53% (Figure 4.19).

Figure 4.19. The EU is the second source of greenfield FDI in Costa Rica’s predominant manufacturing sector
Copy link to Figure 4.19. The EU is the second source of greenfield FDI in Costa Rica’s predominant manufacturing sector

Greenfield FDI in Costa Rica, by origin and sector, % of total FDI by sector, 2003-2024

EU FDI has strengthened Costa Rica’s medical and pharmaceutical manufacturing

The bulk of the EU’s greenfield investments in manufacturing are concentrated in the production of medical equipment and supplies as well as pharmaceutical preparations. While the EU remains the second-largest investor in manufacturing, far behind the United States, more than half of its greenfield investment between 2014 and 2024 was directed to this sector, with investment in manufacturing and ICT doubling compared to 2003-2013. EU greenfield investments are highly concentrated in the medical equipment and pharmaceutical manufacturing subsectors, which capture 74% of EU investments in the manufacturing sector and 38% of total EU investments during the period 2014-2024 (Figure 4.20).

Medical manufacturing is a key driver of foreign direct investment within the country. Costa Rica is home to over 90 medical technology multinationals – 9 of which are of EU origin – including 12 of the world’s 30 largest medical technology companies, with manufacturing operations spanning 18 specialised areas. The EU’s presence in this sector in Costa Rica is continuing to grow. In 2024, three new greenfield investment announcements of EU origin were in the medical technology sector (WIPO, 2024[43]; PROCOMER, 2025[44]).

Figure 4.20. EU’s greenfield FDI across sectors and subsectors, Costa Rica, 2014-2024
Copy link to Figure 4.20. EU’s greenfield FDI across sectors and subsectors, Costa Rica, 2014-2024

Costa Rica has become a strategic hub for the manufacturing and exportation of medical devices, ranking as the second largest exporter for medical devices in Latin America and the eighth largest in the world (WIPO, 2024[43]). In 2023, it exported over USD 7.5 billion in medical devices, recording an annual growth rate of 18% since 2017. Medical manufacturing exports account for 42% of Costa Rica’s total good exports, a dramatic increase from merely 5% (USD 288 million) in 2000, highlighting the subsector’s growing economic importance within the country (LATAM FDI, 2024[41]; WIPO, 2024[43]). Employment within the sector has also more than doubled between 2017 and 2023, increasing from 22 399 to 55 000 employees, with most jobs being skill-intensive (LATAM FDI, 2024[41]). Nearly 7 000 of these employees are from EU firms (PROCOMER, 2025[44]). Companies are attracted by Costa Rica’s competitive costs, skilled labour and stable institutions (Box 4.2).

Box 4.2. Costa Rica as a strategic hub for medical device manufacturing and innovation

Copy link to Box 4.2. Costa Rica as a strategic hub for medical device manufacturing and innovation

Representatives from two German companies in medical device manufacturing, G.RAU and MeKo MedTech, highlighted that Costa Rica offers a favourable environment for foreign investments in the area due to its competitive costs, skilled labour and stable institutions.

G.RAU established its operations in Costa Rica in 2012. Its 18 000-square-metre facility is fully dedicated to manufacturing components for medical devices. The company employs 175 people and generates annual sales exceeding USD 15 million. Starting with an initial investment of USD 3.5 million, G.RAU has since re-invested over USD 20 million and plans to invest an additional USD 15 million in the next five years. G.RAU places strong emphasis on workforce development and technical excellence, for which Costa Rica’s skilled workforce is key. The company offers structured training through an internal academy and collaborates with institutions such as INA and private universities. Training focuses on technical skills and leadership. The company has also launched a local R&D unit, which it plans to expand to strengthen innovation capabilities in Costa Rica.

The German firm MeKo MedTech reiterated the highly skilled supply of employees being a key decision factor for the company’s upcoming new branch in Costa Rica, which will entail a first investment of USD 150 000 and infrastructure investments close to USD 500 000 (Leymann, 2025[45]). As a new investor in the country, the company highlighted the country’s free trade agreement with the United States, favourable tariff regimes and free trade zones. A strong tradition of democratic stability, high-quality education and reliable renewable energy were also mentioned as key supports for long-term investment. The presence of a dense medical device ecosystem and well-developed infrastructure further strengthens Costa Rica’s value proposition.

Source: Based on interview with (Quesada, 2025[46]) and (Leymann, 2025[45]).

The U.S. is the leading investor in TKI sectors, followed by the EU, which is increasing its focus on high-value-added sectors

Following active efforts from Costa Rica to focus on high-tech investment attraction, greenfield investments to technology and knowledge intensive (TKI) sectors almost doubled from USD 2.7 billion to nearly USD 4.9 billion between the periods of 2003-2013 and 2014-2024. This reflects an economic shift in Costa Rica’s economy and an upgrading of production sophistication, following a transition from light manufacturing to knowledge-intensive sectors. This significant uprise can be explained by investments in high-tech manufacturing more than doubling and investments in high-tech knowledge-intensive services increasing by more than 50% (Figure 4.21). Between 2014-2024, the United States was the leading investor in both areas. LAC was the second largest investor in high-tech and knowledge-intensive services, while the EU was the second largest investor in high- and medium-tech manufacturing (Figure 4.21). In the period 2003-2013, the share of EU’s investments directed to TKI sectors reached 13%, while in the last decade it increased to 36%, signalling the EU’s increasing focus on this high-value-added sector (Financial Times, 2025[3]).

Figure 4.21. U.S. is the leading investor in TKI sectors
Copy link to Figure 4.21. U.S. is the leading investor in TKI sectors

Greenfield FDI in high-technology and knowledge-intensive sectors, by origin

There is room to improve FDI’s impact on technology and innovation in Costa Rica and increase linkages to local firms

Over the past two decades, nearly USD 1 billion in greenfield FDI in R&D activities has been announced in Costa Rica. While total investment has remained stable between the two periods, the proportion of greenfield FDI targeting R&D activities has decreased by 1 percentage point, accounting for 4% of total greenfield FDI in 2014-2024. The United States remains the main source of R&D-related FDI in Costa Rica, although announced U.S. investments have slightly declined over the past decade. While EU R&D investments remain at lower levels, they more than doubled in absolute value over the past decade, reaching approximately USD 16 million (Figure 4.22). Despite the potential to attract R&D FDI is still largely untapped, there are significant opportunities for spillover benefits to local industries and innovation ecosystems.

The development of manufacturing, in particular, of medical technology – a high-technology-intensive sector – has allowed Costa Rica’s economy to shift towards more sophisticated sectors and move away from previous economic dependence on textiles, food and beverages, and light manufacturing (Alfaro, 2024[47]). However, while the medical technology sector has delivered strong growth and competitiveness gains for Costa Rica, its wider development impact could be amplified by strengthening domestic linkages in tradable goods and services. Costa Rica has achieved remarkable success in positioning itself as a global hub for medical device manufacturing, largely driven by foreign multinationals with export-oriented and efficiency-seeking strategies (Mora-García and Pearson, 2024[42]). Investment in this high-technology, R&D-intensive sector has been a catalyst for economic growth, job creation, and upgrading within global value chains, supported by national efforts to foster a conducive business environment and broader trends, such as nearshoring (Alfaro, 2024[47]).

Figure 4.22. Less than 5% of total greenfield FDI targets R&D activities
Copy link to Figure 4.22. Less than 5% of total greenfield FDI targets R&D activities

Greenfield FDI directed to R&D activities in Costa Rica, 2003-2013 and 2014-2024

Yet, despite this upgrading, linkages with the domestic economy remain limited. Less than 2% of total input purchases by medical device multinationals are locally sourced (Mora-García and Pearson, 2024[42]), underscoring the weak integration of domestic firms into global supply chains. Where linkages do occur, the benefits are significant as evidence suggests that firms supplying multinational enterprises (MNEs) record higher sales (+33%), employment (+26%), assets (+22%) and input costs (+23%) within four years of entering such relationships. Supplying MNEs also enables domestic firms to expand product scope, improve quality, strengthen managerial practices and enhance reputation, reflecting both the demand shocks and valuable learning opportunities created by FDI (Ureña, Manelici and Vásquez, 2019[48]).

4.3.2. The role of FDI in creating (quality) jobs and promoting skills in Costa Rica

FDI has created over 200 000 jobs in Costa Rica in the past two decades

Greenfield FDI has been an important driver of employment in Costa Rica, generating an estimated over 200 000 jobs in the last two decades (2003-2024), with an increase of 120% between both decades as Costa Rica benefited from deeper integration into high-value global supply chains and strong investor interest from OECD partners (Chapter 2). The United States was the largest greenfield FDI investor and generated over 125 000 direct jobs, which represents 62% of all FDI jobs in the period. The European Union ranked second, generating 17% (over 33 000 jobs), followed by investors from the LAC region with 9% (over 17 000 jobs) and the UK with 2% (close to 5 000 jobs). Chinese investments created less than 1% of total FDI-related jobs between and all other foreign investors combined represented 10% (Figure 4.23, Panel A).

Figure 4.23. The U.S. leads in total job creation in Costa Rica
Copy link to Figure 4.23. The U.S. leads in total job creation in Costa Rica

Job intensity in Costa Rica increased substantially, from more than 6300 in 2003-13, to close to 11 000 in 2014-2024 of FDI jobs created per USD billion. EU FDI’s job intensity in 2003-2013 was lower than that of investments from all origins, however it exhibited a sharp, more than three-fold increase in the following decade, surpassing the job intensity of all origins (Figure 4.23, Panel B).

FDI jobs are heavily concentrated in the manufacturing and ICT sectors, accounting for 41% and 22% of total FDI-generated jobs, respectively, during the period 2014-2024 (Figure 4.24, Panel A). Jobs stemming from EU greenfield investments follow a similar pattern. Over the past decade (2014-2024), 38% of EU-generated FDI jobs were in manufacturing and 31% in the ICT sector. This is a significant increase from the past decade, where only 20% and 7% of EU FDI jobs were in these sectors, respectively. In parallel, the share of EU FDI jobs in lower-skilled sectors fell. In the accommodation and food services sector, jobs declined from 39% to nearly zero percent of total EU-generated jobs between the two periods. This reflects a shift in EU FDI toward the creation of higher-skilled employment opportunities in Costa Rica.

In terms of job intensity in 2014-2024 – measured as the number of jobs created per USD 1 billion of greenfield investment – the most job-intensive sectors were administrative and support services (72 000 jobs); ICT (20 000 jobs); and professional, scientific and technical services (14 000 jobs) (Figure 4.24, Panel B). While EU investments are less job-intensive in the administrative and support services sector, they demonstrate significantly higher job intensity in the ICT sector (42 000 jobs), more than double the global average of 20 000. However, EU FDI job intensity in the professional, scientific and technical services sector remains lacking, generating less than 5 000 jobs per USD billion, a low figure compared to the global average of 14 000.

Figure 4.24. Greenfield FDI jobs are concentrated in the manufacturing and ICT sectors
Copy link to Figure 4.24. Greenfield FDI jobs are concentrated in the manufacturing and ICT sectors

During 2003-2024, medical equipment and supplies overwhelmingly stood out as the manufacturing subsector in which FDI generated the most jobs, close to 35 000, which is equal to 44% of total jobs created in the sector (Figure 4.25). Jobs created in this subsector more than tripled between the period 2003-2013 and 2014-2024, as United States led in job creation. The number of EU FDI jobs created in this subsector increased substantially in the latter period, reaching almost 6 000. The remaining manufacturing subsectors experienced relatively less job creation from FDI, with the United States leading as the origin of FDI. Electromedical and electrotherapeutic apparatus as well as pharmaceutical preparations experienced considerable increases in jobs created due to FDI between the period 2003-2013 and 2014-2024, with a growing role for the EU FDI. On the other hand, the number of jobs created in computer and peripheral equipment decreased, while those for semiconductors and other electronic components remained relatively unchanged.

Figure 4.25. Job creation in manufacturing is concentrated in medical equipment and supplies, originating mainly from the U.S.
Copy link to Figure 4.25. Job creation in manufacturing is concentrated in medical equipment and supplies, originating mainly from the U.S.

Greenfield FDI jobs in top manufacturing subsectors, by origin country/region, 2003-2013 and 2014-2024

Foreign firms in Costa Rica contribute positively to key dimensions of development

Foreign firms in Costa Rica contribute positively to Costa Rica’s development through the provision of higher wages, higher productivity, stronger export intensity and a mildly higher amount of skilled jobs. Foreign firms show a higher labour productivity of, on average, 85% more than domestic firms (Figure 4.26, Panel A). Foreign ownership is also found to be positively associated with a wage premium in Costa Rica as salaries from foreign firm are found to be 133% higher than salaries from their domestic counterparts. Firm-level data analysis in Costa Rica suggests that multinational corporations pay on average 9% larger wages than domestic enterprises (Alfaro-Urena, Manelici and Vasques, 2021[49]). This result, while more modest and confirming a positive wage premium of foreign firms in the country, shows more a moderate linkage. The average monthly salary of employees of foreign companies located in free trade zones is USD 2 075 and, specifically, for EU-owned companies, USD 2 029. This is significantly higher than the national average of USD 1 157 and may reflect the concentration of foreign companies in highly skilled and productive sectors, such as medical device and pharmaceutical manufacturing (PROCOMER, 2025[44]).

Foreign firms also show 192% higher export intensity compared to domestic firms, suggesting that foreign firm presence in Costa Rica has increased Costa Rica’s internationalisation and integration in global value chains (GVCs) (Chapter 1). The analysis also shows that foreign firms hire a smaller share of women and skilled women employed, as well as a larger share of skilled employees compared to domestic firms. That said, these relative differences are less striking (Figure 4.26, Panel A).

Moreover, foreign firms are more likely to offer training programmes for their employees and have a higher share of employees on permanent contracts. The prevalence of permanent contracts is important as they provide greater job security and entail specific legal protections. In contrast, temporary contracts are often linked to less stable employment conditions and are associated with poorer health conditions (OECD, 2019[50]). No significant differences are observed between foreign and domestic firms in terms of investment in R&D, process innovation or the top manager being a woman (Figure 4.26, Panel B).

Figure 4.26. Foreign firms pay higher wages, are more productive and export more than domestic firms
Copy link to Figure 4.26. Foreign firms pay higher wages, are more productive and export more than domestic firms

Did foreign firms have better outcomes than their domestic peers in 2022? (yes if score>0; no if score<0)

Similarly, when narrowing the focus to the medical device manufacturing industry, differentials between foreign and domestic counterparts persist. Foreign firms are more productive, pay higher average wages and hire more skilled workers than domestic firms within the industry. However, results regarding export intensity and share of women and skilled women employed are not significant, indicating there are no differences between foreign and domestic enterprises (Figure 4.27).

Figure 4.27. Foreign firms within the medical technology industry are more productive and pay higher wages
Copy link to Figure 4.27. Foreign firms within the medical technology industry are more productive and pay higher wages

Foreign vs. domestic firm performance in Costa Rica’s medical device manufacturing industry in 2022

A skills-virtuous circle: Costa Rica’s skilled labour force attracts FDI, while foreign companies provide more training programmes than domestic firms

A key differentiator for Costa Rica is its specialised talent pool in medical device manufacturing, a highly regulated industry where skills are essential. This pool emerged through initial training by foreign firms and government efforts to build technical capacity, resulting in significant knowledge transfers over the past two decades due to the presence of global leaders in the medical technology sector in Costa Rica. The growing supply of skilled workers in Costa Rica has enabled rapid implementation of sophisticated processes, including the local production of the most complex and high-risk category of medical devices (Class III devices) (Mora-García and Pearson, 2024[42]). Strong collaboration between industry and academia has reinforced the pipeline of engineers and technicians, with firms helping shape curricula and donating latest technology equipment to educational institutions. This has supported a growing medical technology ecosystem that operates within a complementary model, in which Costa Rica serves as an efficient and reliable platform that enables multinational companies to reinvest savings into R&D and innovation at their headquarters. This innovation, in turn further enhances the local industries’ competitiveness.

Beyond medical technology, Costa Rica has also attracted major investment in the digital sector. Intel, present since 1997, re-invested EUR 1.07 million in infrastructure and talent development between 2023 and 2025, employing more than 3 400 people across its ‘Megalab’ and global services centre in Heredia. This illustrates how Costa Rica’s skilled workforce and long-term strategy for sustainable development have positioned the country as a hub for advanced digital operations. The presence of global firms, such as Intel, Amazon (U.S.), Bayer (Germany) and Dole (Ireland), confirms Costa Rica’s growing role in global value chains, underpinned by continuous investment in human capital and innovation (Euronews, 2025[52]).

Figure 4.28. EU leads in greenfield FDI to education and training in Costa Rica in 2014-2024
Copy link to Figure 4.28. EU leads in greenfield FDI to education and training in Costa Rica in 2014-2024

Greenfield FDI to education and training activities in Costa Rica

Greenfield FDI in education and training, although limited, has further reinforced Costa Rica’s skilled workforce. EU greenfield FDI in education and training in Costa Rica rose from virtually zero in 2003-2013 to nearly 1% of total EU FDI in 2014-2024, reaching USD 18million. This makes the EU the main investor in this area, reflecting a growing commitment to strengthening employees’ skills and capabilities. By contrast, US investment in education and training declined in both volume and share over the same period (Figure 4.28).

4.3.3. International co-operation enhances FDI and its impact in Costa Rica

FDI has been central to Costa Rica’s development, underpinning its strong economic performance and integration into global value chains. Alongside significant US inflows, EU investment has supported high-technology manufacturing and achieved important labour outcomes. In 2024, total FDI grew by 14%, reaching USD 4.3 billion, surpassing by 37% the target set in the 2023-2026 National Development and Public Investment Plan (PNDIP), which also seeks to attract investment into tourism, agro-industries and sustainable sectors beyond the greater metropolitan area (Ministerio de Planificación Nacional y Política Económica, 2022[53]; UNCTAD, 2025[1]). International co-operation, particularly through initiatives like the EU’s Global Gateway Investment Agenda (EU–LAC GGIA), can play a crucial role in mobilising investment, strengthening the enabling environment and fostering FDI that triggers innovation, productivity growth and inclusive development across regions.

Mobilised private finance in Costa Rica was historically limited, but has recently grown

Mobilised private finance for development directed to production sectors held relatively small weight as a share of gross national income (GNI) until it peaked in 2021 and 2023 (Figure 4.29). This reflects a broader international trend of increasingly engaging the private sector for development financing. In Costa Rica, the most common leveraging mechanisms in 2014-2023 were direct investment in companies and Special Purpose Vehicles (SPV) (42%), followed by syndicated loans (38%) (OECD, 2025[26]). Until 2020, ODA in Costa Rica aligned with broader LAC trends, while other official flows (OOF) played a relatively larger role in the country than it did in the region in the last decade.

Figure 4.29. Despite volatility, official flows to production sectors have been increasing recently
Copy link to Figure 4.29. Despite volatility, official flows to production sectors have been increasing recently

Official flows to production sectors in Costa Rica and LAC as % of GNI, 2014-2023

Private finance is increasingly mobilised in a wider range of sectors in Costa Rica, although it remains concentrated in a few when it comes to value. During 2014-2023 in Costa Rica, mobilised private finance for development was mainly directed towards transport and storage (39%), agriculture, forestry and fishing (24%), as well as banking and financial services (17%) (Figure 4.30). While private finance for development is expanding into sectors largely complementary to FDI and aligns with one of the EU’s primary FDI focuses in Costa Rica – transport and storage – there is an opportunity to further align mobilised finance with high-value FDI sectors, such as manufacturing and technology, to strengthen synergies, boost innovation and enhance inclusive and sustainable development outcomes.

Moreover, sectoral trends in Costa Rica and LAC often differ. In the region, mobilised private finance tends to be substantially more concentrated in banking and financial services, a knowledge-intensive, high-value-added sector, as well as energy. Flows to the energy sector in Costa Rica are dedicated to renewable energy, illustrating the use of development finance to support the green transition. Nonetheless, this is undermined by the low share of mobilised private finance going to this sector (4%) (OECD, 2025[26]).

Figure 4.30. Mobilised private finance in Costa Rica is concentrated in transport and storage
Copy link to Figure 4.30. Mobilised private finance in Costa Rica is concentrated in transport and storage

Mobilised private finance for development, by sector, 2014-2023

Besides engaging with the private sector directly, international co-operation also enhances the long-term appeal of productive sectors, increasing their attractiveness to investors. The role of Official Development Assistance (ODA) is especially important in the early stages when mobilised private finance is only beginning to gain traction, as is the case in Costa Rica.

In particular, ODA can strengthen the enabling environment for investment by enhancing skills, training and education, thereby enhancing the employability of the workforce. Between 2014 and 2023, the bulk of ODA targeting skills development was concentrated in vocational training. The EU emerged as the top donor in this area in Costa Rica, providing significant support for vocational education and training initiatives (USD 2.6 million). These are essential for building a skilled workforce capable of attracting and sustaining high-value investments. By targeting vocational and technical skills, ODA complements private sector investments. It helps local labour markets meet the needs of advanced manufacturing, digital services and other high-productivity sectors, thereby boosting the development impact of foreign direct investment. Interestingly, while the United States leads in investing in technology, knowledge and innovation (TKI) sectors in Costa Rica and provides the largest share of FDI to R&D activities among all investors, it contributes relatively less ODA to training.

EU partnership supports investment and development strategies in Costa Rica

The European Union is contributing to facilitating Costa Rica’s sustainable investment and development goals through the Global Gateway Investments Agenda (GGIA). A key area within Costa Rica’s goals is green infrastructure and connectivity through electric public transport. The EU is supporting the creation Costa Rica’s first electric train with lines spanning more than 50km in the greater San José metropolitan area, financed by a USD 250 million loan from the EIB, aligned with the country’s National Decarbonisation Plan (EIB, 2025[54]; Government of Costa Rica, 2018[55]). This document, along with the country’s NDP, set out a long-term vision for a green, competitive and resilient 3D economy – decentralised, digitalised and decarbonised (Ministerio de Planificación Nacional y Política Ecónomica, 2022[56]). In this context, under the EU-LAC Digital Alliance, a series of initiatives are aimed at improving connectivity, such as the setup of a cyber-intelligence centre in Costa Rica, the deployment of 5G network, fist launched in 2024 utilising European technology, as well as European industry collaboration with the National Learning Institute to enhance digital skills and support entrepreneurship (European Commission, n.d.[57]).

The EU’s Multiannual Indicative Programme 2021-2027 identifies key political and economic priorities in Costa Rica and sets forth a Cooperation Facility. The EU Cooperation Facility entails a budget of EUR 14M targeting four vital components: green and blue transition, digitalisation and innovation, technical support as well as strategic communication (European Comission, 2025[58]). Regarding health, another pilar of the EU-LAC GGIA, the EU is involved in accelerating the country’s pharmaceutical manufacturing subsector (European Commission, n.d.[59]). Apart from initiatives directly under the GGIA, EU and Costa Rica seek to expand their collaboration in the domain of sustainable finance. For instance, the EU helped develop the country’s sustainable finance taxonomy, invested in the country’s first blue bond and is striving towards increasing access to capital within the Global Green Bond Initiative (European Commission, n.d.[57]).

4.4. Dominican Republic: FDI trends and impacts, with a focus on EU investments

Copy link to 4.4. Dominican Republic: FDI trends and impacts, with a focus on EU investments

4.4.1. The role of FDI in enhancing production structures and innovation

FDI has strengthened its structural and stabilising role in the Dominican Republic’s economy, with a focus on tourism

FDI plays an increasingly important role in the Dominican Republic’s economy and is a source of macroeconomic stability. The country was the largest FDI recipient in the Caribbean in 2023 (UNCTAD, 2024[60]). The FDI stock-to-GDP ratio has risen steadily, peaking at 56% in 2020 and then dropping to close to 50% in 2024 – close to the LAC average but below the OECD level. Inflows have shown resilience, remaining stable even during the 2020 pandemic shock, which heavily affected the tourism sector. On a per capita basis, FDI has continued to increase, allowing the Dominican Republic to slightly surpass both LAC and OECD averages, underscoring strong investor confidence and the structural role of FDI in a growth model oriented toward trade and global integration (UNCTAD, 2025[1]; World Bank, 2025[61]).

Between 2014 and 2024, the accommodation and food services sector attracted 53% of total greenfield investments over this period (Figure 4.31). The electricity, gas, steam and air conditioning supply sector followed with 24%, manufacturing accounted for 11%, information and communication with 6%, and transportation and storage with 4% of total investments. All remaining sectors combined represented just 3% of greenfield FDI during this period.

Figure 4.31. The accommodation and food services sector received over half of greenfield FDI
Copy link to Figure 4.31. The accommodation and food services sector received over half of greenfield FDI

Greenfield FDI to the Dominican Republic, by sector

Sectors and subsectors attracting greenfield FDI shifted significantly between 2003-2013 and 2014-2024. Between 2003-2013, mining and quarrying, along with non-renewable energy, dominated greenfield FDI, accounting for nearly 30% and 12% of total investments, respectively. The subsequent decade saw a shift toward renewable energy, notably solar energy. Between 2014 and 2024, mining and quarrying, and non-renewables received less than 1% of total investments, while renewable energy sources attracted nearly 24% of total greenfield FDI, up from just 11.5% in the previous period. Solar energy alone experienced the most striking increase among renewables, with its share rising from 2% (USD 340 million) to nearly 15% of total investments over the respective periods (USD 2.5 billion). This reflects a shift in investment trends towards more environmentally sustainable sectors, as well as alignment with the governments agenda to increase renewable energy generation substantially. Accommodations also saw a significant rise in FDI, with its share increasing from 21% to 52% over the same periods, corresponding to USD 3.7 and 9.3 billion in the two respective periods (Figure 4.32).

Figure 4.32. Solar energy recorded the second largest increase in greenfield FDI share
Copy link to Figure 4.32. Solar energy recorded the second largest increase in greenfield FDI share

Share of total greenfield FDI to the Dominican Republic, by sector and subsector

Between 2018 and 2024, mergers and acquisitions (M&As) in the Dominican Republic were heavily concentrated in the manufacturing and electricity sectors, which recorded total M&A transaction values of USD 1 001 and 926 million, respectively, accounting for all available values of brownfield FDI transactions during this period. The LAC region holds the largest share of brownfield FDI value in manufacturing (88%), followed by the United States (10.5%). (LSEG, 2025[7])

Increasing inward FDI can be attributed to critical actors, such as the national investment promotion agency, ProDominicana (formerly CEI-RD), created in 2017, which targets strategic sectors such as tourism, renewable energy, technology, manufacturing, semiconductors, agriculture and biomedicine (ProDominicana, 2025[62]; OECD/UNCTAD/ECLAC, 2020[63]). The free zone model has also been instrumental in attracting investment and enhancing export competitiveness by offering tax exemptions and administrative facilitation. While this model is gradually evolving toward greater economic integration, FDI attraction – particularly in tourism and manufacturing – remains central to the country’s development strategy (Consejo Nacional de Zonas Francas de Exportación, 2025[64]).

The EU is the leading provider of greenfield FDI to the Dominican Republic in its main investment sectors and a key driver of renewable energy growth

The European Union has been the largest greenfield investor in the Dominican Republic over the past two decades. EU investments accounted for 33.5% of total greenfield FDI between 2003 and 2024, exceeding USD 11.5 billion. The United States ranked second with over USD 7 billion (20%) in investments, followed by investors from the LAC region, with over USD 3.5 billion (10%). FDI from the United Kingdom and China was relatively low, around USD 1.3 billion (3%) and USD 150 million, respectively. Investments from other origins combined totalled over USD 11 billion (32%). Notably, EU investments increased significantly between the past two decades from around USD 4.8 to 6.8 billion (Financial Times, 2025[3]).

The EU is the primary source of greenfield FDI in the Dominican Republic’s main investment sectors. In the period 2014-2024, investments of EU origin into accommodation and food services represented 46% of investments within the sector. While the EU share was lower compared to the previous decade, investments almost doubled in absolute value, signifying a broader trend of increased investment into this sector. The EU also led in the electricity sector, with USD 1.5 billion, representing 35% of total investments in the sector, and manufacturing, with slightly over USD 650 million (35%), increasing its share of investments in these sectors as compared to the previous decade (Figure 4.33).

Figure 4.33. The EU is the main investor in accommodation and food services, electricity and manufacturing
Copy link to Figure 4.33. The EU is the main investor in accommodation and food services, electricity and manufacturing

Greenfield FDI, by origin and sector, % of total FDI by sector, 2003-2024

The sectoral composition of greenfield FDI by origin shows broadly similar patterns for the European Union and the United States. Between 2014 and 2024, most EU investments went to accommodation and food services (62%), followed by electricity (21%), manufacturing (10%), ICT (4%), and transport and storage (4%). US investments display a comparable profile, with accommodation (55%), electricity (20%) and manufacturing (12%), followed by transport and storage, and other smaller shares. By contrast, LAC investors focus more heavily on ICT (26%), with the remainder distributed across accommodation (42%), electricity (12%), manufacturing (11%) and finance (8%). Investments from the UK are almost exclusively directed to electricity, while Chinese investment concentrates, by almost 70%, in accommodation and the remaining in manufacturing.

The EU is the primary provider of greenfield FDI to the electricity sector by virtue of continued growth in its investments in the sector over the past two decades. EU greenfield FDI was highly concentrated in renewable energy, both in the 2003-2013 and 2014-2024 periods, with its share increasing slightly over time to represent more than one-fifth of total EU greenfield FDI. Between 2014 and 2024, almost all EU greenfield FDI in the Dominican Republic’s electricity sector targeted solar energy, accounting for 21% (USD 1.5 billion) of total greenfield flows (USD 6.8 billion) (Figure 4.34). In contrast, investment in other EU–LAC GGIA priority areas has remained limited. Telecommunications, which accounted for a notable share of EU FDI in the earlier period, have declined in relative terms, while digital services and medical instruments have only recently emerged, maintaining a marginal role (Financial Times, 2025[3]).

Figure 4.34. EU FDI is concentrated in accommodation, renewable energy and manufacturing
Copy link to Figure 4.34. EU FDI is concentrated in accommodation, renewable energy and manufacturing

FDI of EU origin across sectors and subsectors in the Dominican Republic, 2014-2024

Efforts from EU investors have aligned toward the renewable energy sector as it has become a national priority for the Dominican Republic. This has been driven by the high cost of fossil fuel imports and the country’s pledge to cut GHG emissions by 27% by 2030 (Quevedo et al., 2024[65]). The country aims for 30% of electricity generation from renewables by 2030, a significant shift given its current dependence on imported fossil fuels, which account for 62% of emissions and expose the economy to global oil price volatility (Pellerano & Herrera, 2025[66]; International Trade Administration, 2024[67]; Pichardo, 2025[68]). Progress is underway: the share of renewables in electricity generation more than doubled from 11% in 2021 to over 23% in 2024 (IRENA, 2024[69]; Dominican Today, 2025[70]; World Energy Council, 2024[71]). The Dominican Republic is at a pivotal moment in energy transition and FDI serves as a vital catalyst in accelerating this shift. Achieving full decarbonisation, however, will require an estimated USD 16 billion in investment (Quevedo et al., 2024[65]).

FDI is pivotal in advancing this transition by providing capital, technology and expertise. The Dominican Republic has built a favourable investment climate. It offers incentives to businesses developing renewable energy technologies in efforts to increase domestic energy production from sustainable sources. The Renewable Energy Incentives Law (2007) grants tariff exemptions on imported inputs and a 10-year tax holiday on profits from renewable energy and equipment sales (International Trade Administration, 2024[67]). These incentives have already helped attract foreign investment, reduce reliance on imports and diversify the energy mix, positioning the country at a critical juncture in its low-carbon transition.

A stable regulatory environment combined with growing market opportunities have positioned the Dominican Republic as an increasingly attractive destination for clean energy investments. In Bloomberg’s 2024 Climatescope index, which evaluates energy transition potential in emerging markets, the Dominican Republic ranked as the fifth most attractive investment destination for renewable energy in LAC (BloombergNEF, 2025[72]). European companies have been critical in advancing this sector, while ensuring FDI had development impact (Box 4.3).

Box 4.3. Akuo Energy, Energy, a European company investing in renewables fosters local impact

Copy link to Box 4.3. Akuo Energy, Energy, a European company investing in renewables fosters local impact

Akuo Energy, a French renewable energy company, has been central to the Dominican Republic’s strategy of reaching 30% renewable energy in its grid by 2030. Akuo’s subsidiary in the Dominican Republic has the largest workforce among its Latin American operations (Chile, Colombia, the Dominican Republic and Uruguay). Since 2017, its subsidiary – employing 22 professionals, 90% of them Dominican, including individuals from communities near project sites – has pioneered projects in underserved regions, including the flagship Pecasa Wind Farm in Monte Cristi, co-financed by PROPARCO. Akuo’s investments have created quality jobs, promoted gender inclusion and built local skills, while also improving infrastructure, supporting land titling for 120 families and stimulating local businesses. By combining strict environmental safeguards with socio-economic impact, Akuo illustrates how renewable FDI can accelerate inclusive and sustainable development, setting a precedent for further private investment in the sector.

Source: Based on interviews with (Longo, 2025[73]).

Greenfield FDI to tech- and knowledge-intensive (TKI) sectors decreased, while more FDI is necessary in R&D

Greenfield FDI to TKI in the Dominican Republic decreased from USD 1.8 billion to 1.3 billion (-30%) between 2003-2013 and 2014-2024, as investments from all origins, except for LAC, slowed down. Because TKI sectors are key drivers of innovation, productivity and long-term economic growth, decreased FDI from investors outside of LAC is concerning, especially since greenfield FDI into TKI in the LAC region has grown considerably (Chapter 1).

EU was the largest source of greenfield FDI in this sector in 2003-2013, with USD 684 million. LAC overtook the EU in 2014-2024, with USD 691 million, following a surge in investment (Figure 4.35). High-tech knowledge-intensive services stood out as the largest TKI subsector by amount of FDI in both time periods. The focus on high-tech knowledge-intensive services contrasts with the LAC trend, where medium-tech manufacturing received the largest share of investment (Chapter 1). High-tech manufacturing received very low greenfield FDI of any origin in any time period, while investments in medium-tech manufacturing decreased substantially. The adverse trend of slowed investment into TKI sectors in the Dominican Republic is also reflected in the share of FDI into this sector of total investment as it decreased for all origins (Financial Times, 2025[3]).

Figure 4.35. While central for the Dominican Republic, FDI to TKI sectors decreased
Copy link to Figure 4.35. While central for the Dominican Republic, FDI to TKI sectors decreased

Greenfield FDI to TKI sectors, by origin

Greenfield FDI in R&D activities remain limited. Over the last two decades, less than 1% of total greenfield FDI was directed to R&D. The EU has been a significant player, accounting for the majority of FDI in R&D during this period, followed by the UK and the U.S. Total investment remained relatively stable during the last two decades, at around USD 150 million (Figure 4.36). The low level of investment in R&D may partly be due to the concentration of FDI in tourism-related services, where R&D activity is limited. However, there is potential to leverage FDI to promote innovation and technological development, facilitating spillovers and technology transfer from foreign to domestic firms operating in the country.

Figure 4.36. Greenfield FDI in research and development activities remain limited
Copy link to Figure 4.36. Greenfield FDI in research and development activities remain limited

Greenfield FDI in R&D activities, 2003-2013 and 2014-2024

4.4.2. The role of FDI in creating (quality) jobs and skills in the Dominican Republic

The EU leads in total job creation in the Dominican Republic

Greenfield FDI has created an important number of jobs in the Dominican Republic, with the EU as the main contributor. FDI is estimated to have generated more than 60 000 jobs during the 2014-2024 period, a 50% increase compared to the previous decade. During the past two decades, EU companies were responsible for the creation of 36 000 jobs, accounting for 35% of all FDI-related jobs in the country (Figure 4.37, Panel A). The United States ranked second, generating 26% of FDI-related jobs (26 000 jobs), followed by investors from the LAC region with 12% (12 000 jobs). Chinese and UK investments created both around 1% of total FDI-related jobs between 2003-2024 and all other foreign investors combined generated 25% (25 000 jobs).

Total job intensity of FDI in Dominican Republic moderately increased from close to 2300 in 2003-13 to 3400 in 2014-24 of FDI jobs created per USD billion. EU FDI exhibits a broadly similar job intensity, yet the uprise between decades was less pronounced than that of investments from all origins (Figure 4.37, Panel B).

Figure 4.37. The EU stands first in total job creation
Copy link to Figure 4.37. The EU stands first in total job creation

As the distribution of greenfield investments suggests, job creation from greenfield FDI is primarily concentrated in the accommodation and food services sector, as well as manufacturing, representing 73% of jobs created from all investments and 87% of jobs created from EU investments (Figure 4.38, Panel A). Moreover, one billion investment in these sectors is estimated to generate around 2 900 jobs and 9 000 jobs, respectively (Figure 4.38, Panel B).

Figure 4.38. EU greenfield FDI job creation is concentrated in the accommodation and food services, and manufacturing sectors
Copy link to Figure 4.38. EU greenfield FDI job creation is concentrated in the accommodation and food services, and manufacturing sectors

Greenfield FDI has substantially contributed to job creation in manufacturing, with the number of jobs created reaching almost 17 000 (Financial Times, 2025[3]). In the five largest subsectors by job creation, greenfield FDI of EU origin played the largest role (5 400), with the United States in second place (4 400) (Figure 4.39). FDI job creation has also experienced a notable shift as jobs are increasingly concentrated in the medical equipment and supplies subsector, while clothing and clothing accessories saw a decline to zero in the latter decade. EU FDI has been a driver of the shift towards medical equipment manufacturing as it created the most jobs in this subsector (3 300).

Figure 4.39. FDI jobs in manufacturing increasingly concentrated in medical equipment, with EU as the main origin
Copy link to Figure 4.39. FDI jobs in manufacturing increasingly concentrated in medical equipment, with EU as the main origin

Greenfield FDI job creation in manufacturing subsectors, by origin

Foreign firms are associated with significantly higher labour productivity, wage premium and export intensity,

Foreign firms are found to have significantly higher labour productivity, average wages and export intensity than domestic firms in the Dominican Republic. Foreign firms show 78% higher labour productivity than domestic firms, indicating that foreign firms generate substantially more revenue per worker. Furthermore, foreign firms pay their employees, on average, 110% higher wages than domestic firms, hinting at a positive impact of foreign firms on labour market outcomes. As in most LAC countries, however, workers in EU greenfield FDI-intensive sectors work longer hours in the Dominican Republic – they average 52.1 hours per week compared to 45.5 in other sectors (Chapter 2). Foreign firms also exhibit larger export intensity; that is, exports relative to total sales as compared to domestic firms. This finding suggests that foreign firms may contribute to the Dominican Republic’s internationalisation and integration in GVCs (Chapter 1). Lastly, the analysis reveals no significant differences between domestic and foreign firms in terms of share of women employed (Figure 4.40, Panel A).

Job quality is an important indicator of sustainability and is influenced by the stability of employment contracts (permanent vs. temporary) and opportunities for skills development (Chapter 2). However, there are no significant differences when it comes to the presence of employee training programme, introducing processes of innovation, investment in R&D or top managers being women. Lastly, regarding contract types, which is another important indicator of job quality, foreign firms do not differ significantly from domestic firms in their use of temporary contracts (Figure 4.40, Panel B).

Figure 4.40. Foreign firms pay higher wages, are more productive and have higher export intensity than domestic firms
Copy link to Figure 4.40. Foreign firms pay higher wages, are more productive and have higher export intensity than domestic firms

Did foreign firms have better outcomes than domestic firms in 2024? (yes if score>0; no if score <0)

In the Dominican Republic, jobs originating from EU FDI are shown to be concentrated in sectors with higher wages, wage quality and labour formality. Workers in these sectors more often have a written and permanent contract, a pension scheme, health insurance, as well as work more hours and are predominantly male (Chapter 3). Jobs created by EU FDI tend to be present therefore in sectors in which workers are compensated better and are more protected by social security, yet these sectors tend to also hire substantially more men than women. A more in-depth analysis on these gender disparities reveals that sectors with jobs created by EU FDI also show lower levels of female labour informality (11%) than other sectors in the Dominican Republic (37%) (Figure 4.41). Moreover, despite the concentration in male dominated sectors, EU FDI jobs tend to be created in sectors which pay women higher quality wages, as determined by relation to the national median wage.

Figure 4.41. EU greenfield FDI jobs concentrated in sectors with lower female labour informality and higher quality wages for women
Copy link to Figure 4.41. EU greenfield FDI jobs concentrated in sectors with lower female labour informality and higher quality wages for women

FDI contributes to formal job creation, but has limited backward linkages with local companies and regional inequalities persist

FDI is largely concentrated in the Dominican Republic’s free trade zones (FTZ), with almost 60% of companies operating in FTZs being of foreign origin (LATAM FDI, 2025[77]). However, a survey of firms operating in FTZs shows that these firms do not purchase their inputs locally as local inputs are relatively expensive and of inferior quality. This demonstrates the limited backward linkages that FDI creates within the country. Linkages with local companies must be strengthened in order to create spillover benefits from FDI (Ramcharran, 2017[78]). Furthermore, there is a technological dualism between FTZs and the rest of the economy, which has resulted in FDI – which is primarily directed to FTZs – creating unbalanced regional growth (Ramcharran, 2017[78]).

The country’s proximity to the United States and free trade agreement (FTA) with the United States – DR-CAFTA – make the Dominican Republic an attractive hub for global investors looking to nearshore. Many US enterprises have relocated companies from Asia to the Dominican Republic to nearshore production (LATAM FDI, 2024[79]). FTZs have created significant hubs of wealth that primarily export to the United States. Overall, FTZs account for 67% of the country’s exports (LATAM FDI, 2025[80]). The country is trying to diversify investments and is promoting agro-industrial and biotechnological free trade zones (LATAM FDI, 2024[79]).

In 2024, FTZs were responsible for the creation of nearly 200 000 direct jobs, with women representing 53% of total employment. Investments have played a key role in empowering female workers, offering them stable, well-paying jobs in different industries, including textiles and medical device manufacturing, and agro-industrial processing. FTZs have also contributed to improved working conditions and creating formal employment with benefits, such as social security, healthcare and professional growth (LATAM FDI, 2025[80]). The development and positive impact of FTZs reflects FDI contribution to the Dominican Republic as FDI is highly concentrated in these zones.

4.4.3. International co-operation enhances FDI and its impact

In the last decade, over 30% of EU greenfield investments in the Dominican Republic have targeted EU–LAC GGIA priority areas. Between 2014 and 2024, EU FDI was concentrated in renewable energy (23%), telecommunications (4%) and medical instruments (3%). By focusing on sectors critical for the country’s green and digital transitions, and expansion of knowledge-intensive industries, these investments provide a strong foundation for complementary international co-operation. Leveraging this momentum can help not only attract further sustainable investment but maximise its development impact, thereby advancing inclusive and sustainable growth, economic diversification and the Dominican Republic’s gradual move up the value chain.

Mobilised private finance is emerging, while ODA plays an important role in enhancing the quality and quantity of FDI to support the green transition

Official Development Assistance (ODA), other official flows (OOF) and private finance play complementary roles in advancing productive transformation and sustainable development. Official flows to production sectors in the Dominican Republic and LAC between 2014 and 2023 reveal three distinct dynamics. First, ODA has remained relatively stable, providing a predictable but modest share of support, generally below 0.15% of GNI across both the Dominican Republic and the region. Second, OOF display high volatility, with the Dominican Republic recording a marked surge between 2018 and 2020 – peaking at over 0.6% of GNI – before declining sharply. Third, mobilised private finance for development has emerged only recently, with flows increasing after 2020 and reaching around 0.2% of GNI in LAC and 0.15% in the Dominican Republic in 2022, though these remain unstable and project-dependent (Figure 4.42).

Compared to the LAC average, the Dominican Republic shows greater volatility, reflecting the outsized role of individual transactions. These patterns highlight the need to consolidate predictable ODA, better channel OOF to support long-term productive investment and strengthen mechanisms to mobilise and stabilise private finance to reduce dependence on volatile flows and reinforce productive transformation strategies. The Dominican Republic illustrates both opportunities and challenges: concessional flows provide a base, but their catalytic use is crucial to mobilise larger and more sustainable private finance.

Figure 4.42. Official flows in the Dominican Republic reached a peak in 2020
Copy link to Figure 4.42. Official flows in the Dominican Republic reached a peak in 2020

Official flows to production sectors in the Dominican Republic and LAC as % of GNI, 2014-2023

Mobilised private finance for development, still at an early but accelerating stage, has concentrated in banking and financial services, energy and industry over the past decade – mirroring regional trends in LAC. The Dominican Republic shows an additional focus on tourism, a major FDI sector (Figure 4.43). This complements EU FDI priorities in the green transition and manufacturing and highlights the catalytic role of concessional resources in production sectors such as energy, where they have helped unlock larger-scale investments. Although ODA volumes remain modest, their strategic use in technical assistance, risk-sharing instruments and project preparation has been instrumental in laying the foundation for mobilising private capital.

Figure 4.43. Mobilised private finance by official development interventions has been concentrated in banking and financial services in the Dominican Republic
Copy link to Figure 4.43. Mobilised private finance by official development interventions has been concentrated in banking and financial services in the Dominican Republic

Mobilised private finance for development, by sector, 2014-2023

EU ODA to the Dominican Republic between 2014 and 2023 shows a highly fluctuating sectoral allocation, reflecting the project-driven nature of EU support and the shifting priorities of the country’s development agenda (Figure 4.44). The composition alternates mainly between transport and storage, and energy, which dominate most years, alongside occasional surges in industry, and water supply and sanitation. The rise in allocations to water and sanitation in 2021–2022 mirrors donor responses to public health and resilience needs during and after the COVID-19 pandemic when water access became a critical area of intervention.

Figure 4.44. EU ODA to the Dominican Republic production sectors fluctuates significantly between transport and storage, and energy
Copy link to Figure 4.44. EU ODA to the Dominican Republic production sectors fluctuates significantly between transport and storage, and energy

EU ODA to the Dominican Republic distributed to production sectors, 2014-2023

ODA support to skills, training and education was overwhelmingly driven by the EU and its institutions in the Dominican Republic between 2014 and 2023. It accounted for nearly all of the USD 35 million allocated over the period. Other donors, including Korea, Japan, Australia and the United States, among others, contributed only marginally. The focus of EU support has been on vocational education and training, which absorbed close to 70% of total allocations. This reflects a strategic orientation towards improving employability and aligning workforce skills with productive sector needs. Smaller but noteworthy shares went to environmental education, water supply and sanitation, and multi-sectoral training programmes, while activities such as teacher training, technical and managerial training, and agricultural skills received limited support (OECD, 2025[28]).

This pattern underscores how the EU is the lead partner in strengthening the Dominican Republic’s skills base and that resources are concentrated in vocational training. The latter is consistent with the country’s emphasis on linking education to labour market demand and a foundation for FDI. However, the lack of donor funding in other areas of education, such as advanced technical training, teacher development and sector-specific skills, suggests scope for broadening support to foster a more comprehensive skills ecosystem.

EU partnership supports investment and development strategies in the Dominican Republic

The Dominican Republic’s National Development Plan (NDP) sets out four strategic axes for its development by 2030: a democratic, rule of law state; society with equal rights and opportunities; competitive, innovative, sustainable economy; and sustainable, climate-oriented, risk-managing society (Ministerio de Economía, Planificación y Desarollo, 2012[81]). In this context, EU’s Multiannual Indicative Programme 2021-2027 for the Dominican Republic identifies three priority areas for EU co-operation for which EUR 14M have been dedicated: increasing economic opportunities, especially for women and youth, nature and cities for people and a modern state close to its citizens (European Comission, 2022[82]). The first priority area, in particular, aims to improve the business climate, support the competitiveness of MSMEs and promote employability, and can likely contribute to attracting investment in the country. The green transition is also central to the NDP, the country’s ambition to achieve carbon neutrality by 2050, and is also one of the areas under Global Gateway, where the EU is contributing to sustainable urban transport in the country’s capital city by upgrading its metro line, with the explicit goal of meeting emission targets (Presidencia de la República Dominicana, 2022[83]; European Commission, n.d.[84]).

The EU, under Global Gateway, also facilitates the advancement of digital transformation with the aim of boosting innovation and connectivity across sectors, for instance the EU launched Digital Connectors, which promote business and internationalisation by connecting enterprises, hosted the LAC Cyber Competence Centre, leading cybersecurity co-operation and promoted a National Research and Education Network (European Commission, n.d.[85]). Apart from projects directly under Global Gateway, the EU is also involved in complementary areas such as expanding sustainable finance in the Dominican Republic which can help enhance the impact of investment in the green transition. The EU is developing green bond markets via the Global Green Bonds Initiative and helping attract investors towards them by scaling up the financial normative setup in the country (European Commission, n.d.[86]). Under the conditions created by the Global Green Growth Initiative, the Dominican Republic’s first sovereign green bond was issued in 2024 (European Commission, n.d.[85]).

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Annex 4.A. Methods

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Indicators Type I methodology

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Type 1 Indicators measure how foreign firms perform relative to domestic firms for a given outcome (OECD, 2019[50]). It takes positive value if foreign firms have higher outcomes than domestic firms and negative value if foreign firms have lower outcomes, on average. The indicator is constructed as the proportional difference between average outcomes of foreign firms and average outcome of domestic firms:

𝑇𝑦𝑝𝑒 1 = (Ȳ_F − Ȳ_D) Ȳ_D

where Ȳ_F is the average outcome of foreign firms and Ȳ_D is the average outcome of domestic

firms and population averages are calculated using survey weights.

Confidence intervals are reported for Type 1 indicators, both to indicate the extent of firm heterogeneity (i.e. the extent to which the data at the firm level vary around the mean) and to indicate whether estimated differences are statistically significant at the 95% confidence level. In the figures, if the confidence interval crosses the zero line, the difference of average outcomes of foreign and domestic firms is not statistically significant. The confidence interval is calculated as follows:

CI = (Ȳ_F− Ȳ_D ) ± t_0.25 ∗ s_p $\sqrt{\frac{1}{n_{F}} + \frac{1}{n_{D}}}$

where 𝐶𝐼 represents the upper and lower bounds of the interval, 𝑠_𝑝 is the sample standard error, 𝑛_𝐹 is the number of observations of foreign firms and 𝑛_𝐷 is the number of observations of domestic firms used to construct the indicator.

Type 1 indicators are unadjusted inferential comparisons that estimate the average differences in outcomes between foreign and domestic firms. They suffer from limitations such as omitted variable bias, do not account for other relevant firm characteristics, such as sectoral location or size, and cannot be used to identify causal relationships. They should be interpreted as as snapshot, first-order comparison between foreign and domestic firms, not definitive evidence of ownership effects.

Indicators type II methodology

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Type 2 Indicators show whether FDI is concentrated in sectors with higher or lower sustainable development outcomes, while controlling for the economic size of each sector (OECD, 2019[50]).

This indicator type requires sector-level information on FDI, GDP and the development outcome considered (e.g. labour productivity or wages), and compares two sector-weighted averages. The first weighted average (the “FDI-weighted” outcome) is a function of sector-level GDP and FDI. The second weighted average (the “baseline” outcome) only uses sector-level GDP shares as weights. The indicator is constructed as the proportional difference between the FDI-weighted and baseline outcomes:

$T y p e 2 = \frac{\sum_{s} ω_{s} Y_{s} - \sum_{s} δ_{s} Y_{s}}{\sum_{s} δ_{s} Y_{s}}$

$ω_{s} = \frac{1}{\sum_{s} \frac{F D I_{s}}{F D I_{T O T}} \frac{G D P_{s}}{G D P_{T O T}}} (\frac{F D I_{s}}{F D I_{T O T}} \frac{G D P_{s}}{G D P_{T O T}})$

$δ_{s} = (\frac{G D P_{s}}{G D P_{T O T}})$

where 𝑌𝑠 is the average outcome of sector s; 𝜔𝑠 is the weight corresponding to sector s constructed using the product of the GDP share and the FDI share of sector s; 𝛿𝑠 is the GDP share of sector s. By controlling for sector-level GDP, the indicator provides information on the extent to which the relative distribution of FDI across sectors relates to economy-wide outcomes. The indicator takes positive value if the FDI-weighted outcome is higher than the baseline; and vice versa.

Type 2 Indicators were adjusted in this paper to fit data availability and better reflect investment dynamics. Instead of a point in time, this analysis used FDI from the years 2013-2020, averaged. Furthermore, total gross value added by sector was utilised in place of GDP. Type 2 indicators were calculated separately for different regions for comparison purposes.

Type 2 Indicators are a descriptive measure which shows whether FDI is directed into sectors with higher or lower outcomes, based on available data on these sectors. They do not identify any causal relationships and no claims as to whether FDI influences these outcomes can be made. Furthermore, due to data unavailability, the analysis was performed at the sector level, masking subsector discrepancies in outcomes.

National Accounts Sector	Corresponding ISIC Rev. 4 Sectors	ISIC Rev. 4 Code
Agriculture, forestry, fishing	Agriculture; forestry and fishing	A
Industry (not including manufacturing)	Mining and quarrying; Electricity; gas, steam and air conditioning supply; Water supply; sewerage, waste management and remediation activities	B, D, E
Manufacturing	Manufacturing	C
Construction	Construction	F
Distribution, trade, repairs; accommodation, food services, activities	Wholesale and retail trade; repair of motor vehicles and motorcycles; Transportation and storage; Accommodation and food service activities	G, H, I
Information and communication	Information and communication	J
Financial and insurance activities	Financial and insurance activities	K
Real estate activities	Real estate activities	L
Professional, scientific, technical activities; administration, support service activities	Professional, scientific and technical activities; Administrative and support service activities	M, N
Public administration; compulsory s.s.; education; human health	Public administration and defence; compulsory social security; Education; Human health and social work activities	O, P, Q
Other Service activities	Arts, entertainment and recreation; Other service activities; Activities of households as employers; undifferentiated goods- and services-producing activities of households for own use; Activities of extraterritorial organisations and bodies; Not elsewhere classified	R, S, T, U, X

Note: Type 2 indicators assess whether FDI is concentrated in sectors with better outcomes (labour productivity, average wages, skill intensity and gender share). To calculate these indicators, the national account sector groupings are used. The table above displays the corresponding ISIC sectors.

Annex 4.B. Data

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Type 1 Indicators data

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Indicator	Year	Source	Variable(s) used	Number of domestic firms	Number of foreign firms
Invest in R&D	2023	WBES	During last fiscal year, establishment spent on R&D (excluding market research)?	281	73
Process innovation	2023	WBES	During last 3 years, establishment introduced new/significantly improved process	281	72
Share of permanent employees	2023	WBES	Number of permanent full-time employees at end of last fiscal year; number of full-time temporary employees at end of last fiscal year	281	73
Training programmes	2023	WBES	Formal training programmes for permanent full-time employees in last fiscal years	281	73
Top female manager	2023	WBES	Top Manager Female	281	73
Female share of employees	2022	REVEC	Female employees / total employees	17 013	1 246
Average wages	2022	REVEC	Total labour cost / total employees	68 382	1 384
Labour productivity	2022	REVEC	Firm revenue / total employees	59 773	1 416
Export intensity	2022	REVEC	Export value/ total revenue (The variable underlying export intensity was not thoroughly examined, and the precise value of the coefficient should be interpreted with caution)	3 039	369
Skill intensity	2022	REVEC	Skilled employees / total employees	17 054	1 165
Female skill intensity	2022	REVEC	Female skilled employees / skilled employees	11 349	1 166

Indicator	Year	Source	Variable(s) used	Number of domestic firms	Number of foreign firms
Labour productivity	2022	REVEC	Firm revenue / total employees	136	48
Average wage	2022	REVEC	Total labour costs / total employees	151	48
Export intensity	2022	REVEC	Export value/ total revenue (The variable underlying export intensity was not thoroughly examined, and the precise value of the coefficient should be interpreted with caution)	12	16
Female share of employees	2022	REVEC	Female employees / total employees	53	47
Skillu intensity	2022	REVEC	Skilled employees / total employees	51	39
Female proportion of skilled employees	2022	REVEC	Female skilled employees / skilled employees	45	46

Indicator	Year	Source	Variable(s) used	Number of domestic firms	Number of foreign firms
Invest in R&D	2016	WBES	During last fiscal year, establishment spent on R&D (excluding market research)?	321	32
Process innovation	2016	WBES	During last 3 years, establishment introduced new/significantly improved process	322	32
Share of permanent employees	2016	WBES	Number of permanent full-time employees at end of last fiscal year; number of full-time temporary employees at end of last fiscal year	304	29
Training programmes	2016	WBES	Formal training programmes for permanent full-time employees in last fiscal years	321	32
Top female manager	2016	WBES	Top Manager Female	324	33
Female share of employees	2024	DGII database	Female employees / total employees	90 511219	13819
Average wages	2024	DGII database	Total labour costs / total employees	21970 042	23663
Export Intensity	2024	DGII database	Export value / total revenue	141 974	3 432
Labour productivity	2024	DGII database	Total revenue / total employees	25177 874	21734

Revec Database

The REVEC database is an administrative dataset of formal firms in Costa Rica. The database is constructed using data from administrative records, mainly tax records and Social Security Agenda records, as well as economic surveys. To protect confidentiality, firm observations were excluded in sectors with fewer than five foreign firms or in cases where a single firm accounts from more than 60% of sectoral sales. Employee data include all formal employees. The processing of the information required to generate the results presented in this document was carried out by the Central Bank of Costa Rica (BCCR), under the necessary technological security conditions to ensure the integrity and confidentiality of the information. However, the views expressed in this document are the sole responsibility of the authors and do not reflect the official position of the BCCR.

DGII Database

DGII (Dirección General de Impuestos Internos de la República Dominicana) database is constructed using data from the taxpayer registry of the Dominican Republic. It encompasses all firms that pay taxes in the country. Importantly, foreign ownership is self-reported in this database. The processing of the information required to generate the results presented in this document was carried out by DGII. However, the views expressed in this document are the sole responsibility of the authors and do not reflect the official position of the DGII.

Type 2 Indicators data

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Indicator	Year range	Outcome Data Source	Outcome Data variable	Other Information
Labour productivity	2015-2023	OECD National Accounts	Gross total value added by economic activity / employees by economic activity
Average wages	2015-2023	OECD National Accounts	Compensation of employees (wages and salaries and employer’s social contributions) by economic activity / number of employees by economic activity
Skill intensity	2020-2023	ILO STAT	Employment by economic activity and occupation	Skilled labour corresponds to ISCO skill levels 3 and 4

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