Retained Earnings, Foreign Portfolio Ownership, and the German Current Account: A Firm-Level Approach

DOI

In some countries, a sizable fraction of savings is derived from corporate savings. Although larger, traded corporations are often co-owned by foreign portfolio investors, current international accounting standards allocate all corporate savings to the host country. This paper suggests a framework to correct for this misleading attribution and applies this concept to Germany. For the years 2012 to 2020, our corrections retrospectively reduce German savings and consequently the German current account surplus by, on average, €11.5bn annually. This amounts to lowering Germany’s average official current account surplus (€226.6bn) across these years by approximately five percent.

Identifier
DOI https://doi.org/10.15456/ger.2024176.1156621382
Metadata Access https://www.da-ra.de/oaip/oai?verb=GetRecord&metadataPrefix=oai_dc&identifier=oai:oai.da-ra.de:780287
Provenance
Creator Goldbach, Stefan; Harms, Philipp; Jochem, Axel; Weichenrieder, Alfons
Publisher ZBW - Leibniz Informationszentrum Wirtschaft
Publication Year 2024
Rights Creative Commons Attribution 4.0 (CC-BY); Download
OpenAccess true
Contact ZBW - Leibniz Informationszentrum Wirtschaft
Representation
Language English
Resource Type Collection
Discipline Economics