Entrepreneurial Efficiency : An Empirical Framework and Evidence

Abstract

This paper examines a particular aspect of entrepreneurship,

namely firms' activities in adapting to idiosyncratic environmental

changes by appropriately reallocating resources. It

presents an empirical framework that examines the social value

of firms' abilities to predict and adapt to the movement of

idiosyncratic shocks. In order to demonstrate how to implement

our menthod, the quantitative effect of firms' prediction ability

on Tatal Factor Productivity (TFP) is investigated using

semi-aggregated data from Japan's Census of Manufacturing.