This series consists of papers with limited circulation, intended to stimulate discussion.

We analyze the inuence of endogenous competitiveness on multi-national activity. Competitiveness is endogenized by assuming that rms di¤er on R&D commitment power, i.e.: some \u85rms are leaders in R&D. We show that \u85rms with higher commitment power tend to invest more in R&D and consequently also tend to be more competi-tive than rivals that lack such capability. As a result, \u85 rms with higher commitment power have higher propensity to become multinationals than rms with lower commitment power. In addition, the former use the R&D leader advantage to compel the latter to not enter the market or, in case of entry, to force them to adopt the domestic strat-egy. Therefore, in addition to the proximity-concentration trade-o¤, we identify another FDI determinant: strategic technological compet-itiveness