Hybrid Unsupervised Exploratory Plots: A Case Study of Analysing Foreign Direct Investment

Abstract

The curse of dimensionality has been an open issue for many years and still is, as finding nonobvious and previously unknown patterns in ever‐increasing amounts of high‐dimensional data is not an easy task. Advancing in descriptive data analysis, the present paper proposes Hybrid Unsupervised Exploratory Plots (HUEPs) as a new visualization technique to combine the outputs of Exploratory Projection Pursuit and Clustering methods in a novel and informative way. As a case study, HUEPs are validated in a real‐world context for analysing the internationalization strategy of companies, by taking into account bilateral distance between home and host countries. As a multifaceted concept, distance encompasses multiple dimensions. Together with data from both the countries and the companies, various psychic distances are analysed by means of HUEPs, to gain deep knowledge of the internationalization strategy of large Spanish companies. Informative visualizations are obtained from the analysed dataset, leading to useful business implications and decision making.