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This doctoral dissertation comprises three chapters that collectively examine the internationalization strategy of Spanish Multinational Enterprises (MNEs), focusing on the proactive use of political risk when selecting the location of their subsidiaries. The first chapter studies the relationship between political risk and scope of internationalization. Drawing on the Uppsala model, the diversification and the portfolio theory, the behavior of Spanish MNEs towards political risk is examined. The second chapter focuses on the new members of the European Union, paying special attention to political risk and the quality of institutions. The results show that there still exist differences between Eastern and Western regions when selecting the location of the FDI. Finally, the third chapter analyses FDI flows from Southern Europe to two nearby developing regions: North Africa and Central and Eastern Europe. Despite FDI flows are expected to fall due to higher political risk, those from the countries in the sample increase, because these MNEs are trying to take advantage of their political capabilities to obtain competitive advantages.