Exportweltmeister: Germany’s Foreign Investment Returns in International Comparison

Franziska Hünnekes (), Maximilian Konradt (), Moritz Schularick (), Christoph Trebesch () and Julian Wingenbach ()
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Franziska Hünnekes: Centre de recherche de la Banque Centrale européenne - Banque Centrale Européenne
Maximilian Konradt: Graduate Institute Geneva
Moritz Schularick: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, Kiel Institute for the World Economy - Kiel Institute for the World Economy, CEPR - Center for Economic Policy Research
Christoph Trebesch: Kiel Institute for the World Economy - Kiel Institute for the World Economy, CEPR - Center for Economic Policy Research, Ifo Institute
Julian Wingenbach: Goethe University Frankfurt = Goethe-Universität Frankfurt am Main

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Abstract: Germany is a world champion in exporting capital ("Exportweltmeister"). Few countries have invested larger amounts of savings abroad. However, we show that Germany plays in the third division when it comes to investment performance. We construct a comprehensive new database of foreign investment returns for 13 advanced economies going back to the 1970s. Germany's foreign returns were 2 to 5 percentage points lower, per year, than those of comparable countries. Germany also earns significantly less within asset classes, especially for equities and FDI. These aggregate results are confirmed when using return data from 50,000 mutual funds worldwide. German investment funds are worse at stock picking and at timing the market than their international peers. This is particularly true for the "Big 6" German mutual fund companies. German households would have fared much better with a passive investment strategy.

Keywords: Foreign Assets; Investment Returns; International Capital Flows (search for similar items in EconPapers)
Date: 2025-05
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-05448425v1
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Published in Journal of International Economics, 2025, Journal of International Economics, 155, pp.104056. ⟨10.1016/j.jinteco.2025.104056⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05448425

DOI: 10.1016/j.jinteco.2025.104056

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