<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>In advancement of interpretable machine learning (IML), this research proposes local interpretable model-agnostic explanations (LIME) as a new visualization technique in a novel informative way to analyze the foreign direct investment (FDI) inflow. This article examines the determinants of FDI inflow through IML with a supervised learning method to analyze the foreign investment determinants in Hungary by using an open-source artificial intelligence H2O platform. This author used three ML algorithms—general linear model (GML), gradient boosting machine (GBM), and random forest (RF) classifier—to analyze the FDI inflow from 2001 to 2018. The result of this study shows that in all three classifiers GBM performs better to analyze FDI inflow determinants. The variable value of production in a region is the most influenced determinant to the inflow of FDI in Hungarian regions. Explanatory visualizations are presented from the analyzed dataset, which leads to their use in decision-making.</p>
</abstract>

In advancement of interpretable machine learning (IML), this research proposes local interpretable model-agnostic explanations (LIME) as a new visualization technique in a novel informative way to analyze the foreign direct investment (FDI) inflow. This article examines the determinants of FDI inflow through IML with a supervised learning method to analyze the foreign investment determinants in Hungary by using an open-source artificial intelligence H2O platform. This author used three ML algorithms—general linear model (GML), gradient boosting machine (GBM), and random forest (RF) classifier—to analyze the FDI inflow from 2001 to 2018. The result of this study shows that in all three classifiers GBM performs better to analyze FDI inflow determinants. The variable value of production in a region is the most influenced determinant to the inflow of FDI in Hungarian regions. Explanatory visualizations are presented from the analyzed dataset, which leads to their use in decision-making.

Interpretable Machine-Learning Approach in Estimating FDI Inflow: Visualization of ML Models with LIME and H2O

TalTech Journal of European Studies

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

In advancement of interpretable machine learning (IML), this research proposes local interpretable model-agnostic explanations (LIME) as a new visualization...

Interpretable Machine-Learning Approach in Estimating FDI Inflow: Visualization of ML Models with LIME and H2O

Published Online: May 26, 2021

Page range: 133 - 152

DOI: https://doi.org/10.2478/bjes-2021-0009

Keywords
FDI, H2O, local interpretable model-agnostic explanations, machine learning

© 2021 Devesh Singh, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Interpretable Machine-Learning Approach in Estimating FDI Inflow: Visualization of ML Models with LIME and H2O

Published Online: May 26, 2021

Page range: 133 - 152

DOI: https://doi.org/10.2478/bjes-2021-0009

KeywordsFDI, H2O, local interpretable model-agnostic explanations, machine learning

© 2021 Devesh Singh, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
FDI, H2O, local interpretable model-agnostic explanations, machine learning