- California does in fact lose business and jobs because of relocation, but the effect on employment is negligible. In any year from 1993 to 2002, the net job loss from business relocation was never higher than one-tenth of 1 percent of the total number of jobs. . .
- Employment change is primarily driven not by interstate relocation but by the expansion and contraction of existing businesses and by the births of new businesses and the deaths of existing ones. . .
- When they do move, businesses are much more likely to move locally than across state boundaires. . .
In other words, someone is creating a positive-feedback loop that is scaring the crap out of medium and small businesses in the state, driven by a justifiable frustration at complicated regulation. Nonetheless, fear-mongering at the state of things in the world's fifth largest economy is not productive. One wonders whether the rust-belt states are claiming the same problems as they lose population in droves to the sun-belt. California is a great place to do business, especially relative to where else you can go, even if sub-optimal in all aspects.
You can read the entire report here in the California Economic Policy Journal.