Visualizing Industrial Development Distance to Better Understand Internationalization of Spanish Companies

Abstract

The analysis of bilateral distance between home and host countries is a key issue in the internationalization strategy of companies. As a multi-faceted concept, distance encompasses multiple dimensions, with psychic distance being one of the most critical ones for the overseas investments of firms. Among all the psychic distance stimuli that have been proposed until now, the present paper focuses on Industrial Development Distance (IDD). Together with data from both the countries and the companies, IDD is analysed by means of neural projection models based on unsupervised learning, to gain deep knowledge about the internationalization strategy of Spanish large companies. Informative projections are obtained from a real-life dataset, leading to useful conclusions and the identification of those destinations attracting large flows of investment but with a particular idiosyncrasy.