2010 Reports

German outward FDI and its policy context

Hirdina, Ralph; Jost, Thomas

German companies started early to internationalize their operations. They ranked among the top three of foreign investors measured by the value of their outward foreign direct investment (OFDI) stock by the end of 2008. German FDI abroad increased in close connection with the rise of German exports, and received a new stimulus through the further integration of European markets and the opening up of Eastern Europe in the 1990s. After record FDI outflows in the boom years 2006 to 2008, German OFDI dropped markedly in 2009 - but less than in the previous downturn between 2002 and 2003. In recent years, the German Government has continued to provide a sound legal framework for German companies going abroad by creating a wide network of bilateral treaties and offering support as well as information services as the internationalization of the German corporate sector improves the competitiveness of the country's economy and promotes exports.