Attracting Corporations: These Data Show Nevada Rising And California Sinking
Friday, January 30, 2015

A recent paper by Matthew D. Cain, an economic fellow at the Securities and Exchange Commission, Stephen B. McKeon, an Assistant Finance Professor at the University of Oregon, and Steven Davidoff Solomon, a Professor of Law at the  University of California, Berkeley – School of Law provides strong evidence that Nevada is succeeding in attracting incorporations.  These authors found that Nevada rocketed from 1.79% of initial incorporations in the period 1965-1979 to 19.61% by 2000-2013.  They also found that from 1995 to 2013, Nevada followed Delaware as the most popular state for reincorporations.  Delaware clearly dominated with 64.95%, but Nevada’s second-place share of 7.98% significantly surpassed all other states, none of which comprised more than 3%.  According to these authors, only 64 reincorporations, or 10.02% of reincorporations in the nineteen year period, were to a state that is not the headquarters of the firm, Delaware, or Nevada.  California has the highest percentage of public company headquarters (16.48%) but has experienced a precipitous decline in incorporations.  California falling from 4.44% of incorporations in 1965-1979 to 1.82% in 2000 to 2013.

 

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