Using a dataset on the subsector and geographical segmentation of 208 Pharmaceutical companies, a Bayesian panel probit is used to analyze the role of state dependency, size and achieved diversification in affecting entry decision. We properly account for unobservable heterogeneity
in a context with nonstrictly exogenous regressors. We find that achieved diversification, measured by the number of submarkets already entered affects negatively the probability of entry. Beside some country-specific exceptions, size and the lagged dependent variable do not seem to be relevant.
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Document Type: Research Article
DG-Research, European Central Bank, Dipartimento di Scienze Economiche,Università di Brescia, Brescia, Italy
Dipartimento di Economia,Management e Metodi Quantitativi, Università degli Studi di Milano, Milano, Italy
Publication date: 2013-04-01
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