Theoretical literature indicates that foreign direct investment (FDI) inflows can, directly and indirectly, promote exports by augmentation of domestic capital, technological and knowledge-based spillovers, improvements in competitiveness, and strengthening export channels. However, empirical studies have shown that the benefits of FDI for exports may not be automatic and could vary according to the characteristics of the recipient country. Accordingly, the objective of the current study is to understand the implications of foreign investment for exports of 93 developing countries during 2000–2017 using panel data analysis. It also distinguishes between different types of developing countries – dividing the sample into lower-income countries (LICs), lower and middle-income countries (LMICs), and emerging countries – to study the differential effects of FDI for these different country groups. The study finds that FDI complements exports, and the complementary effect is contingent upon the development levels of the host country. FDI is most effective for promoting exports for emerging countries and least effective for LICs. Accordingly, the study advocates for well-designed policies that prioritize channeling FDI to strategic sectors and push for improvements in the quality of human capital, financial markets, and infrastructure.