Best State for Business? Yes, California
    2015-11-15

    There are plenty of reasons to presume that California must be a bad place to do business. The Tax Foundation says the state's tax structure is the third worst for business in the U.S. Forbes ranks California's business costs fifth highest among the 50 states and its regulatory environment the eighth most burdensome. Why then does the market, where buyers and sellers determine relative value, show otherwise? California-based companies surpass their competitors in the U.S. by most measures of performance favored by investors. Since January 2011, when Edmund G. "Jerry" Brown Jr., became governor for the third time, the 63 publicly traded California companies in the Standard & Poor's 500 produced the best total return among the five states with the largest populations. California companies in the S&P 500 delivered returns of 134 percent; the closest big-state challenger was Florida, whose S&P companies had an 82 percent return, according to data compiled by Bloomberg. Texas-based companies delivered 52 percent during the period. Companies domiciled in California also outperformed the S&P 500 during the past four years by a margin of 23 percent. Among the California industries making the state No. 1 in business are health care, returning 267 percent, consumer staples (302 percent), specialty pharma (235 percent), energy (30 percent) and biotech (333 percent). Maybe high taxes and strong regulations don't daunt business leaders if well spent and well aimed. Places that prepare for big 21st-century challenges such as urbanization, climate change and globalization are likely to be the most successful. California companies lead the U.S. in confronting these risks with superior results for shareholders and bondholders. The corporate performance coincides with growing confidence in the state under Governor Brown, now in his fourth term. That's shown by the biggest four-year drop in the cost of state credit default swaps, a kind of insurance against bondholders' losses and a way to speculate on creditworthiness. [ ... ]

    source :
    http://www.bloombergview.com/articles/2015-03-12/best-state-for-business-yes-california

  • 1. Why can we presume that California must be a bad place to do business?
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  • 2. Which state was the closest challenger of California?
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  • 3. List three types of business that makes California No. 1 in business!
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  • 4. What else reflects the corporate performance?
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