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Are Businesses Fleeing the State? Interstate Business Relocation and Employment Change in California

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Publication Date: October 2005

Publisher(s): Public Policy Institute of California

Author(s): Brandon Wall; Junfu Zhang; David Neumark

Funder(s): Public Policy Institute of California

Funder(s): Public Policy Institute of California

Series: California Economic Policy v.1 no.4

Topic: Economics (Economic policy, planning, and development)

Type: Report

Coverage: California


A commonly heard theme in recent public debates about California's economic problems is that the state's economy is hostile to the needs of business. As evidence, it is asserted that businesses are leaving the state in droves, taking Californians' jobs. In reality, little is actually known about the trend of out-of-state business relocation. In this issue of California Economic Policy, the authors examine the phenomenon in a more complete context. They find that California does in fact lose businesses and jobs because of relocation, but the effect on employment is negligible.