Push Factors Affecting Tourism FDI in Sri Lanka

This study investigates the influence of home-country push factors on Foreign Direct Investment (FDI) inflows into Sri Lanka's tourism sector. While Sri Lanka has experienced growth in tourism arrivals, FDI into the tourism industry has not kept pace, prompting a deeper examination of determinants beyond host-country conditions. Employing a mixed methods approach, the study integrates time-series data for Sri Lanka (1977-2023) and panel data from ten FDI-generating countries. Econometric analyses using Vector Error Correction Models (VECM) and panel regressions reveal that economic, regulatory, and geopolitical conditions in home countries significantly impact outbound FDI flows. The findings contribute to the academic discourse by emphasizing the importance of integrating both supply-side and demand-side determinants in FDI research and offer actionable policy recommendations for improving Sri Lanka's investment appeal.