Moving Across Borders: The Determinants of Interstate Business Relocation
9 Pages Posted: 22 Sep 2010
Date Written: September 21, 2010
Businesses moving to other states spark political accusations and concerns about state business climates. However, previous work has demonstrated that interstate business relocation is rare. This short note documents the considerable variation in business relocation rates among states and tests several explanations for this variation. The same states tend to exhibit higher rates of relocation both into and out of the state. Relocation accounts for higher shares of gross employment changes in states where more economic activity is located near the state border. Net employment change has only a modest relationship with in-migration rates and no significant relationship with out-migration rates, confirming that jobs leaving the state are not a bellwether of poor state economic performance.
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