Exportweltmeister- Germany's Foreign Investment Returns in International Comparison

Franziska Hunnekes (), Maximilian Konradt, Moritz Schularick (), Christoph Trebesch and Julian Wingenbach ()

No 03-2023, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: In the past decade, Germany has been the world champion in exporting capital ("Exportweltmeister"). No other country invested larger amounts of savings outside its borders. However, we find that Germany plays in the third division when it comes to investment performance. To show this, we construct a comprehensive new database on the returns on foreign investment for 13 advanced economies back to the 1970s. The data reveal that Germany's annual returns on foreign assets were 2 to 5 percentage points lower than those of comparable countries. Germany ranks last among the G7 countries and earns significantly lower foreign returns within asset classes, especially for equity and foreign direct investments. These aggregate results are confirmed with micro data on equity returns by 50,000 mutual funds worldwide. German funds perform worse across all sectors and destination countries of investment. They also seem to do a worse job in timing the market.

Keywords: International Capital Flows; Foreign Assets; Investment Returns (search for similar items in EconPapers)
JEL-codes: F21 F30 F31 F36 G15 (search for similar items in EconPapers)
Pages: 101 pages
Date: 2023-03-13
New Economics Papers: this item is included in nep-fdg, nep-ifn and nep-int
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Working Paper: Exportweltmeister: Germany's Foreign Investment Returns in International Comparison (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp03-2023

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