Foreign Direct Investments in the German Stock Market from China and the Gulf States

We document empirical evidence that the investment patterns of the two most relevant investor groups from regions with hierarchical structures in the German stock market, namely China (including Hong Kong) and the Gulf Cooperation Council, differ substan-tially. Chinese investors buy large shares in relatively small, but not necessarily young, companies. Since their objective is often to gain control, they appear to pay higher pre-miums when acquiring large equity stakes. Investors from the Gulf states purchase small-er shareholdings in notably larger, older, and more international companies. They seem to seek long-term benefits rather than short-term profits. Our findings are mainly attri-butable to industrial policies pursued by Chinese and Gulf investors, which mirror the different political and economic goals in these two regions.