Foreign Direct Investments in the German Stock Market from China and the Gulf States

Ann-Kristin Achleitner (), Dmitry Bazhutov (), André Betzer () and Henry Keppler ()
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Ann-Kristin Achleitner: Center for Entrepreneurial and Financial Studies (CEFS), Technical University of Munich, Arcisstr. 21, 80333 Munich
Dmitry Bazhutov: Schumpeter School of Business and Economics, University of Wuppertal, Gaußstr. 20, 42119 Wuppertal, Germany
André Betzer: Schumpeter School of Business and Economics, University of Wuppertal, Gaußstr. 20, 42119 Wuppertal, Germany
Henry Keppler: Center for Entrepreneurial and Financial Studies (CEFS), Technical University of Munich, Arcisstr. 21, 80333 Munich, Germany

Credit and Capital Markets, 2021, vol. 54, issue 4, 563-587

Abstract: We document empirical evidence that the investment patterns of the two most relevant investor groups from regions with hierarchical structures in the German stock market, namely China (including Hong Kong) and the Gulf Cooperation Council, differ substantially. Chinese investors buy large shares in relatively small, but not necessarily young, companies. Since their objective is often to gain control, they appear to pay higher premiums when acquiring large equity stakes. Investors from the Gulf states purchase smaller shareholdings in notably larger, older, and more international companies. They seem to seek long-term benefits rather than short-term profits. Our findings are mainly attributable to industrial policies pursued by Chinese and Gulf investors, which mirror the different political and economic goals in these two regions.

JEL-codes: G11 G18 G34 G38 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:kuk:journl:v:54:y:2021:i:4:p:563-587

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