We investigate the strategies of multinational firms in using inter-governmental ties at subnational levels to reduce the political uncertainty of location choice in foreign countries. We propose that multinationals attach importance to their relationships with local governments in host countries and they take the governmental communication conduits between home and host subnational governments as potential shields to resist political expropriation and risk. Our analysis on data of Japanese multinationals’ overseas investment reveals that Japanese firms tend to enter the countries that have international friendship cities (sister cities) with Japan. These effects of sister-city ties on Japanese overseas investment are significant in early years (1990-1999), while diminish in recent years (2000-2009). The formation of sister-city tie as a positive event also has non- durable attractiveness to Japanese firms.