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Or even more generally: if the political (often geographical) entity overlaps with the economical one (as with physical business), the situation is easier.
Cities states govt entities might seek physical businesses not just because of these compounding effects, but because most of the effects remain within your jurisdiction (i.e. control) this way. You export software and suddenly you depend on the EU which you can't control.
There are analogues in physical businesses i.e. federal tax codes, trade wars with china, or export requirements but agree about the benefits staying in your jurisdiction.
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