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Abstract
With one-third of U.S. primary care visits generating a specialist referral, primary care physicians (PCPs) have outsized influence over how patients are allocated across the specialist market and the subsequent care that patients receive. Focusing on PCPs who enter or relocate to a new market, we study the determinants of initial PCP–specialist networks using the universe of 2010–2018 Medicare fee‑for‑service claims across three distinct specialty areas: orthopedic surgery, cardiology, and dermatology. A network‑formation model with two‑sided fixed effects shows that sharing a common practice is the dominant factor in forming initial referral links across all three specialties, followed by geographic proximity and relatively minor effects from homophily across various demographic characteristics. The role of organizational affiliation dissipates over the first four post‑move years, consistent with newly arrived physicians relying on convenience and familiarity when local information is limited and gradually shifting away from such factors over time.