Theoretically, we might expect investments to flow from where capital is abundant to countries in short supply, much like water seeking its level. In practice, countries short on capital often suffer from unstable and corrupt governments, making them unreliable homes for investment.

Investments between rich countries also have the inertia of established partnerships and the efficiency of investing foreign profit back into the country. If a Japanese auto-mobile manufacturer exports to the US more than it imports, it will often use the American dollars within the US to build factories.