The Influence of Emigration on Tourism Outward Foreign Direct Investment: Evidence from China

Abstract

With the growth of economic globalization and international tourism, tourism outward foreign direct investment (OFDI) has become a significant phenomenon in the development of the tourism industry. This article aims to estimate how emigration affects OFDI in tourism. It develops the theoretical framework of the effects of emigration on tourism OFDI, including the outbound tourism effect, the economic effect, the cultural effect, and the social effect. The empirical evidence in China reveals a significant effect of Chinese emigration on China’s tourism OFDI. However, this positive effect is found to decrease over time. This study also suggests that the level of development in the destination country, cultural distance, and geographical distance determine the size of this positive effect. Lastly, it was found that Chinese emigration has also had a positive effect on China’s OFDI in tourism to developed economies and neighboring economies.