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Do state business climate indicators explain relative economic growth at state borders?

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  • Artz, Georgeanne M.
  • Duncan, Kevin
  • Hall, Arthur
  • Orazem, Peter

Abstract

This study submits eleven business climate indexes to tests of their ability to predict relative economic performance on either side of state borders. Our results show that most business climate indexes have no ability to predict relative economic growth regardless of how growth is measured. Some are negatively correlated with relative growth. Many are better at reporting past growth than at predicting the future. In the end, the most predictive business climate index is the Grant Thornton Index which was discontinued in 1989.

Suggested Citation

  • Artz, Georgeanne M. & Duncan, Kevin & Hall, Arthur & Orazem, Peter, 2016. "Do state business climate indicators explain relative economic growth at state borders?," ISU General Staff Papers 201601010800001011, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201601010800001011
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    2. Gurmu, Shiferaw & Sjoquist, David L. & Wheeler, Laura, 2021. "The effectiveness of job creation tax credits," Regional Science and Urban Economics, Elsevier, vol. 90(C).
    3. Tessa Conroy & Steven Deller & Alexandra Tsvetkova, 2017. "Interstate Relocation Of Manufacturers And Business Climate," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 29(1), pages 18-45, March.
    4. Conroy, Tessa & Deller, Steven & Tsvetkova, Alexandra, 2016. "Regional business climate and interstate manufacturing relocation decisions," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 155-168.

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    More about this item

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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