The current increasing volatility in international politics makes it more important to understand how multinational enterprises respond to political tension between host and home countries. This paper explains the impact of macro-level bilateral political tension on micro-level strategy of multinationals in the host country. We developed the idea that patenting may be used to signal a firm’s commitment and contribution to the host country’s economy and development. Data on 437 large multinationals and interviews with senior managers of 20 foreign subsidiaries in China show that patenting local innovation does indeed help an investing firm signal its usefulness to the host country government. It can thus serve as a response to bilateral political tension. The relationship between political tension and local patenting also depends on the relative trade dependence of the home and host countries and on the investing firm’s technology level and its stake in China. The greater the dependence of an MNE and its home country government on the host country, the more likely patenting of local innovations would increase in times of bilateral political tension.

Online marketplaces such as Amazon.com represent a new channel through which multinational enterprises (MNEs) can sell their products in foreign markets, either as third-party sellers or as suppliers to the platform owner. An MNE can have better control of the marketing mix when selling directly on Amazon.com as a third-party seller, but this task entails two challenges. First is the liability of foreignness, and second is the disadvantage of competing with other products that are directly sold by the platform owner. The platform owner sets the rules of the platform and has data and algorithmic advantages, putting competitive pressure on MNEs with tighter control. Data obtained from Amazon are analyzed and reveal that maintaining control as a third-party seller predicts lower sales than being a supplier to the platform owner. However, the penalty associated with retaining control is smaller for MNEs with more host-country experience and country-of-origin advantage. These findings provide new insights into how MNEs leverage platforms such as Amazon.com to expand their global reach.