The latest edition of Special Statistical Publication 10 “Foreign direct investment stock statistics” listing cross-border corporate assets as at the end of 2007 has just been published on our website (www.bundesbank.de under Statistics / Publications / Special Statistical Publications). This special publication is a supplement to our Statistical Supplement 3 “Balance of payments statistics” and is also available in printed form from our Press Office.

A new feature of this edition is that all secondary majority stakes with a balance sheet total of (equivalent to) more than €3 million are recorded, while minority stakes held through dependent enterprises ceased to be included in these statistics at the end of 2007. In addition, unlike as in previous years, the operating variables of economic activity of direct investment enterprises have included data on dependent holding companies since 2007 in order to provide more comprehensive information and conform with international standards.

As in previous years, German enterprises’ cross-border investment increased substantially between the end of 2006 and the end of 2007; German direct investment stocks abroad rose by €74 billion (10%) to €823 billion. Above all, equity capital expanded significantly due, among other things, to still continuing strong profitability in 2007 and the reinvestment of profits. Loans from other affiliated enterprises likewise increased substantially, whereas lending by investors declined. On balance, the rise in German outward foreign direct investment (FDI) was accounted for almost entirely by involvements in EU countries, while the stock of direct investment in the United States fell by almost €25 billion to €142 billion owing primarily to the US dollar's depreciation by 10.5% against the euro between the end of 2006 and the end of 2007. In addition, the turnover (converted to euro) and the number of employees of US enterprises held indirectly by German investors fell significantly in 2007.

Primary inward foreign direct investment stocks in Germany rose more moderately (+4.5%), by €27 billion to €634 billion up until the end of 2007. Foreign investors likewise predominantly increased their equity capital, while reducing their loans. Here again, European investors played the dominant role in foreign direct investment compared with the rest of the world.

With regard to the economic activity of the direct investment enterprises, holding companies accounted for around one-third of the increase in both outward and inward primary FDI, which, although a sizeable proportion, represents a lower weight than in previous years. Nevertheless, at the end of 2007 just over two-fifths of primary outward foreign direct investment and as much as two-thirds of primary inward FDI was made in holding companies. Investors’ real investment objectives can only be ascertained by “looking through” these holding companies and including their investments as secondary direct investment. Up until the end of 2007, the correspondingly consolidated aggregate of primary and secondary direct investment stocks increased by €58 billion to €879 billion in the case of outward FDI and by only €10 billion to €459 billion in the case of inward FDI. While the interest of German investors focused on manufacturing, trade and the financial sector, new investment from abroad was mainly concentrated in the German financial sector.