This paper uses a new firm-level dataset to analyze foreign direct investment (FDI) patterns, focusing on the distinction between horizontal and vertical FDI. The dataset, which includes information on 650,000 multinational subsidiaries across 90 countries and 400 industries, reveals that most FDI occurs between rich countries. The study finds that vertical FDI, particularly intra-industry vertical FDI, is more prevalent than previously thought, with many subsidiaries supplying highly specialized inputs to their parent firms. These intra-industry vertical FDI subsidiaries are often located in high-skill countries and produce high-skill products, suggesting that multinational firms tend to own stages of production that are closest to their final production. The paper also highlights the importance of industry disaggregation in understanding FDI patterns, as many vertical FDI relationships are only visible at the four-digit level. The findings challenge traditional models that emphasize comparative advantage and suggest that vertical FDI is driven by proximity considerations rather than cross-border factor cost differences. The study provides insights into the motivations behind multinational activity and its implications for factor incomes and wage distribution.This paper uses a new firm-level dataset to analyze foreign direct investment (FDI) patterns, focusing on the distinction between horizontal and vertical FDI. The dataset, which includes information on 650,000 multinational subsidiaries across 90 countries and 400 industries, reveals that most FDI occurs between rich countries. The study finds that vertical FDI, particularly intra-industry vertical FDI, is more prevalent than previously thought, with many subsidiaries supplying highly specialized inputs to their parent firms. These intra-industry vertical FDI subsidiaries are often located in high-skill countries and produce high-skill products, suggesting that multinational firms tend to own stages of production that are closest to their final production. The paper also highlights the importance of industry disaggregation in understanding FDI patterns, as many vertical FDI relationships are only visible at the four-digit level. The findings challenge traditional models that emphasize comparative advantage and suggest that vertical FDI is driven by proximity considerations rather than cross-border factor cost differences. The study provides insights into the motivations behind multinational activity and its implications for factor incomes and wage distribution.