The kind and the choice of investment, is often a product of the current environment where one lives in. Hate the place or love it, one may be faced with the challenges of multiple tax systems, regulations and currencies that may pose a threat to ones investment goals and it could also be different and more favourable in another region or new location where one intends to settle or may consider ideal to live in.
You are right. The government of a particular region can decide to give incentives to those resident in that region and are into some kind of investments. In cases like this, lots of prospective investors will be motivated to follow that line of investment. There are cases also where certain kinds of investments or trades are prohibited in a particular region or the choice of investment is not widely recognised or accepted in the region, it will force people to go for investments that will not keep their money hanging. The laws and regulations might favour those resident in a particular region and this goes a long way to influence their choices of investments. Not all forms of investments are favourable to foreign investors.