China's outward foreign direct investment in tourism

• This study examines country choice of China's outward FDI (OFDI) in tourism.
• China's outbound tourism influences its OFDI in tourism.
• Host country tourism economy influences China's OFDI in tourism.
• Host country investment environment influences China's OFDI in tourism.
• Trade and innovation are not key determinants to China's OFDI in tourism.

This study investigates the factors that influence China's outward foreign direct investment (OFDI) in tourism. Employing a panel dataset involving 21 host countries for 10 years (2004–2013), negative binomial regression modelling showed that Chinese outbound investment in tourism is, at least in part, determined by volume of tourism flows to host country, the scale of tourism in that country and the openness to inbound investment. Other variables such as trade relationships between donor and recipient country and measures of innovation were seemingly of little importance. The study indicates a divergence of Chinese firms' OFDI in tourism from its general OFDI country choice pattern and confirms that sector-specific factors may be playing a more significant part in China's OFDI in tourism.