This paper analyzes the patterns of foreign direct investment (FDI) using a new firm-level dataset that tracks 650,000 multinational subsidiaries across 90 countries and 400 industries. The data reveals that most FDI occurs between rich countries, and vertical FDI (subsidiaries supplying inputs to their parent firms) is more prevalent than previously thought. A significant portion of vertical FDI is "intra-industry," where subsidiaries produce inputs close to their parent's final product, making them indistinguishable at the two-digit level. These subsidiaries are not explained by traditional comparative advantage models, as they are often located in high-skill countries and involve high-skill inputs. The paper distinguishes between "inter-industry" vertical FDI (subsidiaries in different industry codes) and "intra-industry" vertical FDI (subsidiaries in the same industry code). Intra-industry vertical FDI is more common and involves high-skill inputs, while inter-industry vertical FDI is less common and often involves low-skill inputs. The data shows that vertical FDI is driven by comparative advantage, with low-skill activities located in low-skill countries. However, when examining intra-industry vertical FDI, the evidence for comparative advantage is weaker, suggesting that proximity and firm-level decisions play a larger role. The paper also highlights that multinational firms tend to own the stages of production closest to their final product, which is consistent with the idea that firms seek to control quality and monitor production. The findings challenge traditional models of FDI by showing that vertical FDI is more prevalent and that intra-industry vertical FDI is driven by proximity and firm-level decisions rather than comparative advantage. The data supports the idea that multinational firms engage in vertical FDI to access high-skill inputs and control production processes, rather than simply to take advantage of factor cost differences. The paper concludes that the patterns of FDI are better understood when considering the firm-level decisions and the proximity of production stages to the final product.This paper analyzes the patterns of foreign direct investment (FDI) using a new firm-level dataset that tracks 650,000 multinational subsidiaries across 90 countries and 400 industries. The data reveals that most FDI occurs between rich countries, and vertical FDI (subsidiaries supplying inputs to their parent firms) is more prevalent than previously thought. A significant portion of vertical FDI is "intra-industry," where subsidiaries produce inputs close to their parent's final product, making them indistinguishable at the two-digit level. These subsidiaries are not explained by traditional comparative advantage models, as they are often located in high-skill countries and involve high-skill inputs. The paper distinguishes between "inter-industry" vertical FDI (subsidiaries in different industry codes) and "intra-industry" vertical FDI (subsidiaries in the same industry code). Intra-industry vertical FDI is more common and involves high-skill inputs, while inter-industry vertical FDI is less common and often involves low-skill inputs. The data shows that vertical FDI is driven by comparative advantage, with low-skill activities located in low-skill countries. However, when examining intra-industry vertical FDI, the evidence for comparative advantage is weaker, suggesting that proximity and firm-level decisions play a larger role. The paper also highlights that multinational firms tend to own the stages of production closest to their final product, which is consistent with the idea that firms seek to control quality and monitor production. The findings challenge traditional models of FDI by showing that vertical FDI is more prevalent and that intra-industry vertical FDI is driven by proximity and firm-level decisions rather than comparative advantage. The data supports the idea that multinational firms engage in vertical FDI to access high-skill inputs and control production processes, rather than simply to take advantage of factor cost differences. The paper concludes that the patterns of FDI are better understood when considering the firm-level decisions and the proximity of production stages to the final product.