For example, in the past year, German parent companies borrowed more from their foreign subsidiaries € 25 bn) than they invested abroad in new equity capital € 13 bn). In this case, it would surely be a mistake to take the net position of these flows to judge the quality of Germany as a location to do business.
And there is another problem: the low threshold for participating interests for FDI. It’s only 10 %. Such a low threshold tells us very little about an investor’s lasting interest. The Bundesbank introduced the reduction in the participation threshold and the inclusion of short-term financial loans and trade credits into the direct investment flows only in 1999 when EMU was set up.