Global Cities represent preferred locations for FDIs, due to their distinct characteristics and their ability to limit contextual distance. Within IB, distance is largely treated as cross-country variables in form of border effects that ease or impede business. In this respect, Global Cities highlights, and helps investigate, an aspect hitherto neglected in research: within-country differences. In contrast, in New Economic Geography, the concept of within-country heterogeneity is captured by the distance effect. Drawing on Global Cities, we combine distance effects, border effects and contextual distance between subnational home and host locations to understand how an MNE’s source location influences its international spread. We make necessary adjustments to the existing location theories in IB and NEG by taking spatial heterogeneity within the home country into consideration.