text: British and Irish Lion North, 23, has signed a new contract with Northampton Saints in England's Premiership.
  The 23-year-old's previous deal was due to expire next summer and he had been linked with a return to Wales.
  "We'd all want to see our best players playing in Wales," Davies said. "Why would we want it any different?"
  Davies was Scarlets chief executive when North left them for Saints in 2013, and moved to the Pro Rugby Wales role in September 2014.
  He would like to see players such as North back in Wales to offer a "return on investment to the regions that have developed them" as well as to reward fans and to inspire younger players.
  Davies added: "From the national squad's point of view, the coaches are very clear that they fundamentally believe that it is a better environment in terms of player management for the players to be playing in Wales.
  "They can manage them better in conjunction with the regions."
  North, capped 55 times by Wales and also a 2013 Lions tourist in Australia, has appeared 42 times for Saints.
  There was speculation he might emulate Wales team-mate and former regional colleague Jonathan Davies, who will return to Scarlets from Clermont Auvergne on a Welsh Rugby Union dual contract next season.
  Former Wales centre Tom Shanklin is also disappointed North will remain in England.
  "It's probably good for him personally because he's at a very good club and in a very good league," Shanklin told Scrum V Radio.
  "But I want to see all the Welsh players back. That's going to strengthen our league and strengthen our product on the field.
  "We had some great news Jon Davies is coming back so it's a bit of a shame."
target: Wales wing George North's decision not to return to a Welsh region is a disappointment, says Rugby Wales chief executive Mark Davies.