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Entrepreneurial Efficiency: Theory

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  • KATSUYA TAKII

Abstract

This paper models firms' entrepreneurial ability according to their ability to predict changes in productivity (i.e., their prediction ability), and derives an aggregate production function as a result of entrepreneurship. An increase in firms' prediction ability improves allocative efficiency in a competitive economy, but can reduce it when opportunities are distorted. It is shown that prediction ability can aggravate distortions in the presence of political risk. Because efficiency affects the total factor productivity (TFP) of an economy, the model can explain how entrepreneurship influences TFP.
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Suggested Citation

  • Katsuya Takii, 2011. "Entrepreneurial Efficiency: Theory," The Japanese Economic Review, Japanese Economic Association, vol. 62(2), pages 196-214, June.
    • Handle: RePEc:bla:jecrev:v:62:y:2011:i:2:p:196-214
    DOI: j.1468-5876.2010.00515.x
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    References listed on IDEAS

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    Cited by:

    1. Takii, Katsuya, 2008. "Fiscal policy and entrepreneurship," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 592-608, March.
    2. Katsuya Takii, 2009. "Entrepreneurial competition and its impact on the aggregate economy," Journal of Economics, Springer, vol. 97(1), pages 1-18, May.
    3. Katsuya Takii, 2004. "Entrepreneurial Efficiency: An Empirical Framework and Evidence," Macroeconomics 0411006, University Library of Munich, Germany.
    4. Aurora AC Teixeira & Carina Silva, 2012. "A new perspective on local political entrepreneurship: Evidence from Portugal," Local Economy, London South Bank University, vol. 27(4), pages 332-354, June.

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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