[boas]

If California and New York are the two worst states for businesses, then why are so many tech companies in California, and financial companies in New York? Yes there are more regulations in California, but clearly they are missing something in their rankings.

[nathanstitt]

That's something I've often puzzled over as well. I've came to the conclusion that a business is made up of individuals, and individuals like to live in nice places.

Nice places are often kept that way by means of regulation - Regulation of both the 'no strip malls' type and the 'no strip mining that mountain' type. Plus maybe they inspect fertilizer plants regularly so they don't explode.

Therefore, I'd posit that strong regulation can actually attract business simply by attracting the right types of people. http://ordinary-gentlemen.com/blog/2013/03/republican-messag... expands on this idea further