The new international division of labor model assigns a major role to the multinational corporation as the orchestrator of a global reallocation of manufacturing away from core industrial countries towards the periphery. Here it is argued that the new international division of labor thesis construes too narrowly the relationship between technological and organizational change in production, cost competitiveness, and corporate location strategies. Further, understanding the role of the multinational corporation depends also on an analysis of the nature of output markets and the competitive strategies of firms. Evidence concerning the distribution of U.S. manufacturing investment abroad is presented, followed by a discussion of changes in production processes, markets, and competitive strategies as they influence international location choice.
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