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

Figure 3.10: Foreign Direct Investment Flows (€ bill.)
a) Total
-5 0
0
5 0
1 0 0
1 5 0
2 0 0
1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1
F oreign F DI in G erm any
G erm an F D I abroad
b) Equity Capital
0
50
100
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Foreign FDI in Germ any
Germ an FDI abroad
c) Credit transactions of German and foreign direct investors
-20
30
80
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
F oreign F DI in G erm any
G erm an F DI abroad
Source: Deutsche Bundesbank database, own calculations.

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Table 3.4: Direct investment with other Member states as the origin or destination
(DEM billion)
Outflow
1997
1998
1999
2000
A
2.850
4.396
1.600
18.066
BL
2.834
5.252
9.826
26.826
E
3.194
4.360
3.434
5.066
F
4.583
15.147
9.185
7.195
NL
-0.587
4.277
7.984
-17.796
UK
5.179
1.745
78.568
-21.706
Others
10.712
11.836
14.493
-1.541
EU
28.765
47.013
125.089
16.110
Inflow
1997
1998
1999
2000
A
2.061
0.465
0.976
-0.947
BL
4.012
2.296
22.257
61.523
E
0.939
0.349
-8.490
-6.065
F
-0.819
1.693
38.368
-2.093
NL
2.754
6.520
6.912
64.982
UK
3.903
15.185
16.505
249.087
Others
1.268
11.199
5.302
8.144
EU
14.118
37.707
81.830
374.631
Source : Deutsche Bundesbank, intenational capital links, May 2001.
Table 3.5: German Direct Investment Abroad by Industrial Sector (DEM billion)
Sector:
90+91
92+93
1994
1995
1996
1997
1998
1999
2000
Primary
1.69
-0.15
-0.36
-0.07
-1.66
-0.20
-0.16
-0.55
0.58
Manufacturing
31.75
22.01
10.55
20.08
16.52
28.08
86.06
90.97
36.43
- petroleum, chemical,
rubber and plastic products
10.20
6.61
0.08
10.05
4.56
10.23
14.07
1.50
14.49
- vehicles and other
transport equipment
6.29
4.28
5.70
4.81
4.02
1.80
62.33
2.07
14.62
- metal and mechanical
products
5.18
4.17
1.20
1.54
2.06
7.42
3.75
57.73
4.06
Services
30.05
29.57
16.44
31.61
45.73
37.56
57.95
98.98
53.28
- financial activities
26.35
10.59
6.82
11.21
26.02
15.52
25.03
57.07
59.65
- real estate and business
activities
..
11.36
6.06
11.54
11.86
13.71
28.09
4.71
-17.10
- other services
1.69
1.85
2.15
3.51
2.94
2.82
3.73
3.56
8.67
Unallocated
14.43
4.39
1.26
4.34
15.87
7.04
12.03
12.17
12.80
Total
77.92
55.82
27.88
55.96
76.45
72.48
155.87
201.56
103.08
Source : OECD Statistical Databases (2002).
In order to assess the size of inflows and outflows one has to compare German data with that of
other Member States taking into account special circumstances that might be reflected by
outliers. In that regard Table 3.6 indicates that as a percentage of GDP outflows have been in a
similar range with those of France and Japan, but considerably below those from the UK and
substantially above those of the US economy. However, as a percentage of exports outflows
have been relatively low indicating that German companies have a certain preference for
serving foreign markets by products from Germany instead of producing abroad.
Foreign direct investment in Germany
Foreign direct investment in Germany was relatively small in volume up to the late 1990s, but it
has grown significantly since, in particular recording an exceptional increase in the year 2000
due to a single transaction in the telecom sector, the USD 200 billion acquisition of
Mannesmann by Vodafone AirTouch (United Kingdom). The latter made Germany last year the
second largest seller in cross-border M&As worldwide, and it made the year 2000 the only one
in which flows to Germany exceeded flows from Germany. Contrary to outbound flows from

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Germany credit transactions played a substantial role in investment flows while equity capital
was less important than it was for German direct investment abroad.