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Retained earnings, foreign portfolio ownership, and the German current account: A firm-level approach

Goldbach, Stefan ; Harms, Philipp ; Jochem, Axel ; Nitsch, Volker ; Weichenrieder, Alfons J. (2024)
Retained earnings, foreign portfolio ownership, and the German current account: A firm-level approach.
doi: 10.26083/tuprints-00027468
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Item Type: Report
Type of entry: Primary publication
Title: Retained earnings, foreign portfolio ownership, and the German current account: A firm-level approach
Language: English
Date: 10 June 2024
Place of Publication: Darmstadt
Issue Number: 246
Series: Darmstadt Discussion Papers in Economics
Collation: 22 Seiten
DOI: 10.26083/tuprints-00027468
Abstract:

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.

Uncontrolled Keywords: current account; balance of payments; corporate savings; retained earnings, foreign portfolio investment; Germany
Status: Publisher's Version
URN: urn:nbn:de:tuda-tuprints-274680
Classification DDC: 300 Social sciences > 330 Economics
Divisions: 01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > International Economics
Date Deposited: 10 Jun 2024 11:35
Last Modified: 11 Jun 2024 11:13
URI: https://tuprints.ulb.tu-darmstadt.de/id/eprint/27468
PPN: 519009215
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