ABSTRACT
The last chapter reinterpreted Dunning’s investment development cycle in a microeconomic framework by introducing the theory of technological competence in analysing the dynamic interaction between technologically innovative indigenous firms in developing countries and foreign technology. Such interaction has enabled foreign technology and expertise to be diffused within the local economy and to have important implications for indigenous technological development and the stimulation of local enterprise. This chapter focuses on the extent to which foreign direct investment as a modality for the transfer of advanced foreign technology has played a complementary role in the development of the indigenous technological capacity of Philippine firms which has enabled these firms to engage in outward direct investment.
