The authors model the influence of direct foreign investments on diversification of the economy of a country importing investments on the basis of Melitz enlarged model of foreign trade (2003) which takes into account company heterogeneity. The results explain that under certain conditions direct foreign investments by means of vertical external effects may foster the increase of goods assortment both in the industry proper and in the industry supplying semi-finished produce. Displacement effect as a result of increased competition is higher for foreign importers than for local producers. Semi-finished produce price decrease happening as a result of direct foreign investment stimulates its further in-flow into the country.