European Economy. Economic Papers. Germany's growth performance in the 1990's

Table 3.2: Direct Investment Flows From and To Germany
Flows from and to Germany (bill. DEM)
Outflows
Inflows
Equity
capital
Other
capital
reinvested
earnings
total
capital
Equity
capital
Other
capital
reinvested
earnings
total
capital
1994
24.800
3.534
2.767
31.104
6.708
6.405
-1.350
11.766
1995
48.194
6.992
3.227
58.413
13.085
8.578
-3.675
17.988
1996
43.539
25.387
9.376
78.302
4.007
13.106
-6.982
10.129
1997
51.071
14.921
6.173
72.166
9.439
12.498
-0.796
21.141
1998
110.780
34.006
10.031
154.820
10.640
32.784
-0.994
42.432
1999
177.548
13.257
10.757
201.532
48.415
63.081
-8.801
102.695
2000
99.444
-7.119
10.757
103.082
205.611
176.930
-8.801
373.740
FDI income
Credit
Debit
Net
1996
22.371
7.174
-15.197
1997
26.273
15.913
-10.360
1998
27.080
22.453
-4.627
1999
28.831
16.687
-12.146
2000
35.530
20.796
-14.735
Source : Eurostat., New Cronos
In line with these developments income from FDI has been increasing. Exceptionally high
outbound flows were observed in the years 1988 and 1999. These increases can be attributed to
a wave of cross-border mergers and acquisitions that drove FDI flows among OECD economies
in the late 1990s.

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The geographical distribution of German outbound flows has been a very broad one (see Table
3.3), but since the mid-1990s much has been directed towards the U.S. economy, in particular in
the year 1988 due to a single transaction, Daimler-Benz's USD 38 billion acquisition of Chrysler
(USA). Among the Member States of the EU the UK has been a key recipient of German direct
investment, but the rankings of recipients have changed a lot from year to year. Other major
flows went to France, Belgium-Luxembourg, and to the Netherlands. The size of flows to
neighbouring countries, most notable to the Netherlands, Austria and Switzerland, suggests that
vicinity played a major role in decisions about FDI.