153 NTU Management Review Vol. 31 No. 2 Aug. 2021 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 Control 1 0.1224 0.0219 -0.1004 0.0617 0.0150 -0.0467 0.0099 0.0158 0.0060 (0.1188) (0.2750) (0.7092) Control 2 0.1651 0.0162 -0.1489*** 0.0685 0.0128 -0.0557* 0.0300 0.0289 -0.0011 (0.0068) (0.0549) (0.9294) Control 3 0.1270 0.0176 -0.1094*** 0.0585 0.0266 -0.0319 0.0419 0.0483 0.0064 (0.0043) (0.1624) (0.6652) Control 4 0.1239 0.0207 -0.1033*** 0.0687 0.0356 -0.0331 0.0670 0.0566 -0.0105 (0.0013) (0.1385) (0.6643) Diff.1 -0.0971 0.0429 0.1400** -0.0269 0.0327 0.0596 0.0590 0.0638 0.0048 (0.0480) (0.2044) (0.8852) Diff.2 -0.1398 0.0486 0.1884*** -0.0337 0.0349 0.0686** 0.0389 0.0507 0.0118 (0.0024) (0.0499) (0.7213) Diff.3 -0.1017 0.0472 0.1489*** -0.0237 0.0211 0.0448 0.0270 0.0313 0.0043 (0.0024) (0.1045) (0.8934) Diff.4 -0.0986 0.0442 0.1428*** -0.0339 0.0121 0.0460 0.0018 0.0230 0.0212 (0.0013) (0.1052) (0.5759) Note: This table presents the DID estimator of innovation for intra-industry analysis. Panels A and B present the DID estimator of the R&D investment and the DID estimator of adjusted patent citations, respectively. t is the event year, i.e. the year in which the Biopharmaceutical firm is approved by the Biopharmaceutical Act. Treated represents the treated firms, i.e. approved biopharmaceutical firms. Control 1, Control 2, Control 3, and Control 4 respectively represent one, two, three, and four control firms matched to each treated firm. The control firms in the intra-industry analysis are unapproved biopharmaceutical firms. Diff.1, Diff.2, Diff.3, and Diff.4 represent the mean difference of variables between Treated and Control 1, Control 2, Control 3, and Control 4, respectively. Numbers in parentheses are p-values. ***,**, and * denote significance at the 1%, 5%, and 10% levels, respectively. In Panel A of Table 3, the approved biopharmaceutical firms do not change R&D investment significantly after the approval year. However, when we consider the time interval (t-1, t+1), the unapproved biopharmaceutical firms exhibit significantly lower R&D investment after the approval year. The DID estimators of the R&D investment for one and two control matched firms are significant. This result implies that compared with unapproved biopharmaceutical firms, approved biopharmaceutical firms have a significantly higher proportion of R&D expenditures to total assets after the Table 3 DID Estimator: Intra-industry Analysis (cont.)
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