German Direct Investment in the UK, 1871–1918

This article examines German direct investment in the United Kingdom between 1871 and 1918. It is based on a new databank encompassing 179 empirical cases of FDI in sales subsidiaries, production units and service sector companies during a period when Anglo-German trade was intensive. FDI was growing as well, due both to the increasing competitiveness of German companies and to rising British non-tariff barriers to trade. German FDI in Britain is put into perspective by comparing it with German FDI elsewhere and with other FDI in the UK. Against this background the article ascertains from a German home country perspective what shape and extent investments took. Investments originating from 14 different branches of the economy are analysed according to type of investment, capital invested, branch, products, legal form chosen, date of entry, and location in the UK. The determinants behind investments are examined, and German FDI in this period is shown to be multi-causal.