This paper analyses how location of multinational enterprises (MNEs) in global cities might be considered in terms of four economic theories: contract theory (CT), behavioral theory of the firm (BTF), new institutional economics (NIE), and transaction cost economics (TCE). The extant research has extensively applied NIE and TCE to study MNE location choice, while AT and BTF have remained rather uncommon. To determine the effect of global city characteristics on location choice we resort to the basic properties of global cities: global interconnectedness, availability of advanced producer services, and multicultural environment (Beaverstock et al., 1999; Goerzen et al., 2013). Additionally, we take into account agglomeration effects. The aim of this study is to show how the basic properties of global cities in couple with agglomeration effects might alter the propensity to locate foreign direct investment according to the aforementioned theories.