The article discusses how companies in manufacturing use foreign affiliates in wholesale and retail trade to support their exports. This type of Foreign Direct Investment (FDI) is called Export-Supporting FDI (ESFDI). The researchers created a model showing that as trade costs decrease, both trade and FDI increase. They analyzed German firm data and found that ESFDI is significant, especially when trade costs are low. Companies that choose ESFDI are smaller than those that produce in foreign markets. This shows a connection between trade and FDI, explaining the simultaneous increase in both activities.