Wholesale trade affiliates of multinational companies play a big role in sales, but a type of foreign investment that helps exports hasn't been studied much. This study introduces the idea of export-supporting FDI, where companies set up distribution and service activities in foreign markets to boost exports while keeping production at home. The research shows that when trade costs go down, this type of FDI increases. This means that both foreign investment and trade go up together. This explains why trade and foreign investment grew in the 1990s and why Euro-area companies invest more within Europe, which goes against traditional models of foreign investment.