efficient markets and entrepreneurship



Most research concerning efficient markets involves stock markets. Is
entrepreneurship an efficient market? In other words, if one has an
idea for a product, what type of return should one assume, assuming
that the risk of the business would be the same as the risk of a
comparable venture in the stock market? If entrepreneurship is
efficient it would appear that starting a business may be unwise. It
may be better to get a job and invest any risk capital in the stock
market. Yet another way to phrase this question is: If one buys a
factory that produces jewelry, and one does not participate in the
running of the company, should one only expect the same return as if
one bought comparable stock in another jewelry business?

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