Entry decisions in the generic pharmaceutical industry

Data on all generic drug entries in the period 1984-1994 are used to estima te which markets heterogeneous potential entrants will decide to enter I fi nd that organizational experience predicts entry. Firms tend to enter marke ts with supply and demand characteristics similar to the firm's existing dr ugs. Larger revenue markets, markets with more hospital sales, and products that treat chronic conditions attract more entry. The simultaneous nature of entry lends to an additional interpretation: specialization is profitabl e because of the severe risk to profits when a market is "overentered." How ever, I am unable to make any conclusions about the efficiency of entry dec isions.