The investor gaze: recognition heuristic, social liability and legal disillusionment among foreign tourism entrepreneurs on Sri Lanka's southern coast

This study examines investment failures among foreign visitors and tourism entrepreneurs on Sri Lanka’s southern coast, exploring what can go wrong after tourism-related familiarity encourages investment. It introduces the “investor gaze” as the epistemic position emerging when tourists become resident investors, distinguishing it from familiarity-based confidence and “substitutional collapse,” a specific failure mechanism. A qualitative, interpretive multiple-case study draws on semi-structured interviews with two Sri Lankan attorneys providing proxy accounts of sixteen matters, alongside Sinhala-language press coverage. Inductive thematic analysis identifies four failure typologies: nominee-title property fraud; partnership and operational breakdown; personal, familial and household entanglement; and structural sector traps. Substitutional collapse appears in eight matters and in dyadic or modified form in three, but does not apply to five, including both sector-trap matters. Where this mechanism operates, investors possess substantial economic capital but limited independent local social capital, relying on one trusted intermediary as a substitute for community embeddedness. Relationship breakdown or intermediary defection leaves them without fallback support. The findings identify initial counterparty matching as a critical vulnerability and distinguish this mechanism from established strong-tie pathologies. The study connects macro-level tourism-driven familiarity effects with micro-level failure evidence as a hypothesis requiring further testing. It offers a due-diligence lens focused on control of title, licences and banking, and access to independent local information, alongside policy proposals requiring testing and costing. Because matters were selected through legal or media exposure, findings do not establish failure prevalence; agreement between attorney and press accounts indicates consistency rather than independent corroboration.