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This study discusses how outward foreign direct investment (FDI) can complement the inward FDI-based technological capability-building process, through an analysis of the Shanghai Automotive Industry Corporation case. When a firm is upgrading its technological capability, outward FDI can allow learners to have access to human-embedded skills and knowledge and other intellectual assets that are hardly accessible through the inward globalization strategy. Access to a wide range of external resources is a critical ingredient for improving technological capability, and it can also promote self-learning capability by encouraging subsequent learning-by-doing practices. Accordingly, outward FDI can augment “active” nature in the “passive” learning mode created by the inward globalization strategy.Massachusetts Institute of Technology. Center for International StudiesMassachusetts Institute of Technology. Department of Urban Studies and PlanningMassachusetts Institute of Technology. Joint Program on the Science & Policy of Global Chang

Out of passivity: potential role of OFDI in IFDI-based learning trajectory