Recent geopolitical tensions and conflicts have escalated, introducing a heightened level of complexity and uncertainty for multinational enterprises (MNEs) operating in the global context. This study probes how MNEs can strategically deploy their host country subsidiaries to counterbalance the repercussions of geopolitical risk emanating from their home country. Drawing from the social geography literature, the study perceives the home and host countries as distinct “places”, each possessing unique attributes that can either aid or hinder the operations of MNEs. When the geopolitical risk in the home country influences MNEs’ place bonding with the home country, host country subsidiaries can serve as both functional and emotional sanctuaries to mitigate the impacts of home-country geopolitical risk. The study uncovers that the geopolitical risk in the home country is negatively related to the foreign divestment of MNEs in the host country. However, not all subsidiaries confer the same benefits to MNEs. The role of geographical “space”, defined by the interconnections and relationships between MNEs and the host country, also bears significance. The study proposes that MNEs’ geo-strategies to alleviate the geopolitical risk from their home country should incorporate both geo-ideological and geo-political alignment with the host country for stronger place bonding. Geo-ideological alignment, characterized by the low psychic distance between the home and host countries, and geo-political alignment, achieved through the participation of the local state equity in the host country subsidiary, can augment the subsidiary’s functional and emotional bonding, thereby serving as a bulwark against home-country geopolitical uncertainties.
