I'm not an expert but I think during last years IE is gaining reputation in and out Spain thanks to the fact that it is doing very well in the rankings, better than IESE and ESADE. However, few people think IE is better than IESE.
IE is still a young school and it will need some years to be considered as reputed as IESE.
On the other hand, I consider that Madrid is better city for business than Barcelona, and IE is the only reputed school in Madrid and I think that fact helps the school to grow quickly. Barcelona may be better for living (beach and mountains nearby).
For you, it also depends in which sector you plan to work and where.
By the way, I suggest you to take the opportunity during your mba to learn some Spanish, which would give you many business opportunities in Spain, Latam and the US. In Barcelona you will find more problems to learn it as most of the local people speak catalan.