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Montana's business environment and the law: do they work together?

Article Excerpt
Introduction

As faculty members in The University of Montana School of Business Administration, we are envious of Idaho and South Dakota business faculty who have a relatively large number of major in-state businesses to use as classroom examples and sources of employment for their students. We have often wondered why Montana hasn't attracted or grown as many national and international firms as Idaho and South Dakota--the authors' "states of envy."

Idaho can boast of the presence of Albertsons' national headquarters, Hewlett-Packard's printer division, Micron Technology (a leading global silicon chip manufacturer), Washington Group International (one of the world's leading industrial firms), Coldwater Creek Clothing headquarters, and J. R. Simplot (a global agribusiness firm). Similarly, South Dakota has attracted Citibank's credit card operations (with 3,200 employees), and it has grown Gateway Computer and Daktronics (a major firm specializing in electronic signs).

These major businesses generally didn't have to locate in those states--they could operate from any state. And while Montana has a number of significant businesses of which we can be proud, nearly all of them are tethered to the state's rich natural resources. Do the business laws of Idaho and South Dakota create legal environments more conducive to growing and attracting larger businesses?

In 1980, South Dakota put itself on the business map by eliminating its interest rate ceiling on credit cards. The result: Citibank moved much of its credit card operation from New York to South Dakota. That legal change focused attention on how a state's business laws can hinder or encourage economic development. Could it be that Montana's business laws hinder the development of nationally-recognized businesses such as those found in Idaho and South Dakota, states that are otherwise quite similar to Montana?

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Montana's economy has grown briskly in the past year, but that growth has been largely based on world prices for natural resources. We are thankful for our state's present economic situation, but realize that natural resource commodity prices often fluctuate dramatically. We also recognize that the natural resource industry typically hires relatively few of...

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