Small-business entrepreneur-headed companies employing 500 or fewer workers account for about 99.7 percent of all U.S. businesses and employ nearly half of U.S. workers. Entrepreneurs’ efforts to create new small enterprises or to expand existing businesses account for between 1 million and 3 million new jobs each year. As a consequence, the enterprise-establishing and business-expanding efforts of entrepreneurs account for about 75 percent of the net increase in U.S. employment. 

Why do states with laws promoting entrepreneurial activity, such as Arizona, Colorado, and Oklahoma, typically experience the largest employment gains each year?