An Evaluation Of Foreign Direct Investment Performance In Costa Rica

Currently many countries search for foreign direct investment as part of the strategy to create new sources of employment, increase their GDP and productivity, and bring development to the domestic market, in other words for the development of their economies and make economic growth happen in their economies.Costa Rica is one of these countries, which has been competing for FDI since almost three decades. The country has adopted economic policies to obtain the best from FDI. Costa Rican government taking advantage of the country’s location, available human resource, stable political conditions and other potentials, has also searched for different opportunities in which foreign companies could invest in Costa Rican territory, with the objective of creating a better business environment and also of setting a platform for Costa Rica to reach a higher economic growth.This research provides a literature review about foreign direct investment and possible effects of FDI in host countries. The research includes the current economic situation of Costa Rica, the conditions for overseas investment in the country and the development of FDI through the years, current situation of FDI in Costa Rica.The research also provides an analysis of correlation between FDI and variables such as GDP, Exports, GDP per capita, GDP growth, tourism investment and the amount of Jobs created by Free Zones of Costa Rica, encountering a high correlation between FDI and GDP, FDI and Exports, FDI and GDP per capita, FDI and Tourism investment and also between FDI and the amount of jobs created in Free Zones, and a very low correlation between FDI and GDP growth. The research also analyzes the Short comings of FDI in the economy of Costa Rica and finally provides the conclusions and suggestions from the research.