This study focuses on the processes of regional investment and disinvestment and on the way in which individuals' perceptions influence investment decisions.
It is argued that heightened confidence in the community can generate a 'psychological multiplier' that creates greater levels of investment activity than would otherwise eventuate. Such a 'psychological multiplier' can account for the recent property development boom in Australian Capital Cities, the present strength of the Queensland economy and past high internal migration from the rest of Australia to S.E. Queensland.
By analyzing the characteristics of the underlying forces that create such confidence this study develops fresh approaches for encouraging regional economic growth. Such promotional activities are considered particularly appropriate to stimulating diversified investment in resource rich, dependent regions. They offer an alternative to conventional industry based financial incentives. Such traditional approaches are criticized as misguided, ineffectual and expensive. A better solution is therefore offered by seeking to operationalize the 'psychological multiplier' in order for regions to gain a reasonable share of limited available new investment.