Proxim
ity to foreign affiliates m
i
ght be conduc
iv
e to stronger export sp
illovers sin
ce it
facilitates the acquisition of
those knowledge parts and com
p
etencies and so on that m
i
ght
lead to expo
rts. Aitk
en
et al.
(1997) address this
point ex
p
licitly creating an index of
foreign m
u
ltinational p
r
esence operating in a certain indus
try
and
region in Mexico. In this
respec
t we f
o
llow them
.
However, export spillovers m
i
ght not sim
p
ly st
op at the region border.
Firstly, because the
determ
ination of those adm
i
nistrative regions
within which externalities are supposed to
m
a
terialis
e is from
an econom
i
c poin
t
of vi
ew arb
itrary. Seco
ndly, becaus
e
contacts
between indigenous and foreign companies, al
beit stronger within regions,
m
a
y occur
between regions also. T
h
irdly, while inform
ation externalities m
i
ght be geographically
concentrated
, com
p
etitio
n ef
f
ects are
less like
ly to. For these reasons, whilst we in
clud
e
m
easures of
regiona
lly c
onstra
i
ned s
p
illov
e
rs, w
e
do not pre
c
lude con
t
ac
ts between f
i
rm
s
operating in different regi
ons in our analysis