Cross-national distance scholars have consistently demonstrated that multinationals invest in ‘similar’ countries due to their efforts to minimize the “liability of foreignness” (LOF). Despite its richness, this literature has largely portrayed locational choices in terms of cost-benefit analyses and minimally examined the subjective nature of distance and the impact of normative beliefs on firms’ perception of distance and LOF. To address this gap, we bridge the literature on distance, LOF, and organizational ideology to explore the influence of shared organizational values, beliefs and ‘ways of looking at the world’ on spatial boundaries. We examine a facet of ideology, the liberalism/conservatism spectrum, to demonstrate the differing behaviors of conservative- and liberal-leaning firms related to investments in distant or close locales. We use the United States because it is an ideal lab in which to study ideology given the political polarization of the country. Our examination of a longitudinal database of firms of more than 800,000 observations provides overall support for the relevance of ideology in shaping the link between distance and foreign location. The study responds to calls by international business scholars to put ideology on the agenda considering the non-ideological portrayals of locational choices prevailing in existing research.
