International trade and foreign direct investment (FDI) have been growing rapidly, but it's unclear if they are used together or as alternatives. A study focused on Europe found that as trade barriers decreased, both trade and FDI increased within the European Union (EU). This suggests that trade and FDI complement each other in Europe, rather than being substitutes. The size of the market and the potential to gain market share are more important factors for FDI than cost differentials.