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Report · August 1999

Rethinking the California Business Climate

Michael Dardia and Sherman Luk

The recession of the early 1990s was one of the severest in California’s history.  Employment dropped sharply and did not return to pre-recession levels for nearly five years.  California’s slow recovery prompted many critics to claim that the state had a bad business climate and that we would continue to lose jobs to neighboring state’s more friendly to business.  In this study, the authors argue that California is simply too large and diverse to have a single, statewide business climate and that analysts and policymakers would be better served to focus on problems at the industry and regional level.


Economic Growth Economy