This paper compares the patterns of foreign investment of two large capital-exporting coun- tries before 1914 - Great Britain and Germany. An original database of German capital exports, comparable to Stone's (1999) data for British capital flows was compiled for the period 1883-1913. Three classes of variables were tested as determinants of capital flows: political conditions in recipient countries, long-term prospects of growth, and institutional characteristics. The empirical analysis supports the view that German capital flows re- sponded to long-term prospects of growth of recipient countries ("fundamentals") as much as British investment. This conclusion is robust after controlling for political a±liation and suggests that the sharp distinction in the literature between "developmental" and "revenue" finances is probably a figment of the absence of detailed data on capital exports outside of Britain.