Globalization brings about the substantial changes on locations of industrial activities,including service outsourcing which is considered as the second stage of business outsourcing.Though there is a great body of literature on outsourcing in management which mainly focuses on reasons and business implications of service outsourcing,very little attention has been paid to spatial distributions of service outsourcing.Based on Dunning's theory of multinational companies and taking macro context and industry activities' characteristics into consideration,a theoretical framework of industry activities' locations has been built up in this paper.Nowadays,globalization context has to be considered to formulate firms' competitive strategy and characteristics of industry activities also influence firms' strategies as well as meanings of location advantages.Spatial patterns of industry activities then are the outcome of matching processes of firms' competitive strategies and location advantages.Finally,the theoretical frame of spatial patterns of industry activities is tested by service outsourcing in China.