Teams Playing Catchup

This is probably more pertinant to smaller leagues but if I am playing as a team in a league with a small number of teams (A-League, Sweden etc.) and sign a heap of great players will the other teams in the league try and do the same to beat me? If not, will it be up to my team to compete strongly in continental competitions to drag the league ratings up?

I feel if one team is streets ahead of the league then the others should be at least trying to sign some good players to help them compete with the strongest teams in the league, I'm just not sure I have seen it in-game. To me, teams only sign players around their own current level, not trying to better it. When playing in Australia I never have trouble bringing players back from overseas as the other A-League clubs don't bother competiting for signatures of Australian players.

with the a-league, you're hampered by a salary cap

but i've always seen the DLR as a way to drag up the rep of the league, ultimately forcing the teams around you (afer you get more european places) to sign better players and then compete

would think it would be quite interesting to see the likes of Sweden with 4 CL places