This paper evaluates the significance of ownership- and location-specific variables in explaining the industrial pattern and geographical distribution of U.S. affiliates' sales in fourteen manufacturing industries across seven countries in 1970. The eclectic theory of international production posits that firms engage in international production when they possess ownership-specific advantages and find it profitable to exploit these advantages in foreign countries rather than at home. The study uses multiple regression analysis to test two main hypotheses: (1) the competitive advantage of a country's enterprises in servicing foreign markets is determined by both ownership and location-specific advantages, and (2) the form of involvement (exports or local production) depends on the relative attractiveness of location-specific endowments. The results show that relative market size and skilled employment ratio are significant for explaining both export and local production ratios, while other variables like wage differentials and net income per sales are more significant for exports. The study also finds that the export/import ratio and net income to sales are key determinants of the form of involvement in the five advanced countries, excluding Mexico and Brazil. The findings support the eclectic theory, highlighting the importance of both ownership and location-specific advantages in explaining international production patterns.This paper evaluates the significance of ownership- and location-specific variables in explaining the industrial pattern and geographical distribution of U.S. affiliates' sales in fourteen manufacturing industries across seven countries in 1970. The eclectic theory of international production posits that firms engage in international production when they possess ownership-specific advantages and find it profitable to exploit these advantages in foreign countries rather than at home. The study uses multiple regression analysis to test two main hypotheses: (1) the competitive advantage of a country's enterprises in servicing foreign markets is determined by both ownership and location-specific advantages, and (2) the form of involvement (exports or local production) depends on the relative attractiveness of location-specific endowments. The results show that relative market size and skilled employment ratio are significant for explaining both export and local production ratios, while other variables like wage differentials and net income per sales are more significant for exports. The study also finds that the export/import ratio and net income to sales are key determinants of the form of involvement in the five advanced countries, excluding Mexico and Brazil. The findings support the eclectic theory, highlighting the importance of both ownership and location-specific advantages in explaining international production patterns.