Hi,
It comes from 2 things:
1. You have the "use chosen library" setting activated in the HikaShop configuration, or your template or another extension adds chosen to your frontend.
2. You have some CSS in the "custom" frontend CSS you can edit under the Display tab of the HikaShop configuration which messes with the elements of the dropdown:
#hikashop_checkout_billing_address_zone select, #hikashop_checkout_shipping_address_zone select, #hikashop_checkout_billing_address_zone input, #hikashop_checkout_shipping_address_zone input{float:left;width:auto;max-width:190px;margin:0px;}
So if you deactivate the chosen library, or remove that CSS code, it would fix the problem.