Are California’s Companies Shifting Their Employment to Other States?

In this paper we examine the dynamics of businesses headquartered in California. In particular, we ask whether California companies are shifting their operations to other states-in terms of either the number of business establishments or the level of employment-through expansions and contractions of existing establishments, as well as births and deaths of establishments. These types of changes could be informative about the business climate in California-perhaps most importantly changes in births of new establishments, which may be most responsive to economic, regulatory, and other conditions that create variability in profitability across states.