We introduce the geopolitical liability of foreignness (LOF) whereby a multinational firm is perceived unfavorably by host country stakeholders because its home country is a geopolitical rival. To reshape perceptions of national origin, the firm can relocate control rights outside of the home country by: (a) moving its headquarters and senior leadership to a friendly country, (b) transferring ownership and control of host country operations to a local partner, (c) shifting the supply chain to the host market. Using a “lab in the field” experimental design, and focusing on customer behavior, we find that only the first two of these relocation strategies help overcome geopolitical LOF as they effectively decrease potential customers’ identification of the firm with its home country and increase their willingness to buy the firm’s products.
