152 The Impact of the Act for the Development of Biotech and New Pharmaceuticals Industry on Firm Innovation in Taiwan 4.3 Intra-industry Analysis 4.3.1 Difference-in-differences Estimator (DID Estimator) Table 3 presents the DID estimator of innovation for intra-industry analysis. In order to consider the time span effect of the Biopharmaceutical Act, we consider the time interval of the pre-event and post-event year from (t-1, t+1) to (t-3, t+3) where t is the event year, i.e. the approval year, when the biopharmaceutical firm is approved by the Biopharmaceutical Act. Panel A and B present the DID estimator of the R&D investment and the DID estimator of the patent adjusted citations, respectively. Table 3 DID Estimator: Intra-industry Analysis Panel A: DID Estimator of R&D Investment: Intra-industry Analysis t-1 t+1 Differences t-2 t+2 Differences t-3 t+3 Differences Treated 14.3224 14.7030 0.3806 13.5214 14.6223 1.1010 13.0075 13.4002 0.3927 (0.8686) (0.5928) (0.8183) Control 1 15.1741 10.3605 -4.8135** 13.6871 10.7748 -2.9123 11.8360 10.5049 -1.3311 (0.0222) (0.1002) (0.3658) Control 2 14.3681 10.5547 -3.8134** 12.4338 10.1346 -2.2992* 10.9985 9.7941 -1.2043 (0.0216) (0.0685) (0.2863) Control 3 13.9605 11.2267 -2.7338** 11.6300 10.8426 -0.7875 10.3005 10.3891 0.0886 (0.0392) (0.4661) (0.9234) Control 4 13.1208 10.3647 -2.7561** 11.2082 10.1346 -1.0736 10.2415 9.7688 -0.4726 (0.0231) (0.2412) (0.5553) Diff.1 -0.8517 4.3425 5.1942** -0.1657 3.8476 4.0133* 1.1715 2.8953 1.7238 (0.0394) (0.0956) (0.3540) Diff.2 -0.0458 4.1483 4.1941* 1.0876 4.4877 3.4002 2.0091 3.6061 1.5970 (0.0646) (0.1148) (0.3541) Diff.3 0.3619 3.4763 3.1144 1.8914 3.7798 1.8884 2.7070 3.0111 0.3041 (0.1319) (0.3653) (0.8500) Diff.4 1.2016 4.3383 3.1367 2.3132 4.4877 2.1745 2.7661 3.6314 0.8653 (0.1240) (0.2695) (0.5662) Panel B: DID Estimator of Adjusted Patent Citation: Intra-industry Analysis t-1 t+1 Differences t-2 t+2 Differences t-3 t+3 Differences Treated 0.0253 0.0648 0.0395 0.0348 0.0477 0.0129 0.0689 0.0796 0.0107 (0.2171) (0.5468) (0.7261)
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