174 The Impact of the Act for the Development of Biotech and New Pharmaceuticals Industry on Firm Innovation in Taiwan firms are more motivated to improve their innovation quality by the Biopharmaceutical Act than high-tech firms. Next, we divide the sample into low and high R&D intensity firms because the previous section shows that the Biopharmaceutical Act encourages biopharmaceutical firms with low R&D intensity to invest more in innovation. This additional inter-industry subsample analysis explores whether the Biopharmaceutical Act also has a consistent effect in encouraging low R&D intensity firms in the biopharmaceutical industry rather than the high-tech industry. The coefficients of the interaction term, After×Treatment, are significantly positive in Panel A.1 of Table 10 but not significant in Panel A.2 of Table 10. These results show that among low R&D intensity firms, the approved biopharmaceutical firms are more encouraged to increase innovation investments by the Biopharmaceutical Act than hightech firms. In addition, for the high R&D intensity group, after the Biopharmaceutical Act, the approved biopharmaceutical firms do not have significantly different R&D intensity than the high-tech firms. This finding, which shows that the approved biopharmaceutical firms are motivated more to increase R&D investment by the Biopharmaceutical Act than high-tech firms, is driven primarily by the group of low R&D intensity firms. Further, in both Panel B.1 and B.2 of Table 10, the insignificant coefficients of interaction term, After×Treatment, show that the Biopharmaceutical Act does not result in any difference in the innovation quality between the approved biopharmaceutical firms and high-tech firms in either the low or the high R&D intensity firm groups. This finding shows that for both low and high R&D intensity firms, the Biopharmaceutical Act does not lead to any difference in the innovation quality between the approved biopharmaceutical firms and high-tech firms. Table 10 DID Regression Result of Inter-industry: Subsample Analysis for Different R&D Intensity Level Panel A.1 DID Regression Results for R&D Investment in the Inter-industry Analysis: Low R&D Intensity Firms One Matched Firm Two Matched Firms Three Matched Firms Four Matched Firms (1) (2) (1) (2) (1) (2) (1) (2) Aftert 1.7445 2.2429* 0.5603 0.7918 0.6222 0.7712 1.1356** 1.2328*** (0.1440) (0.0557) (0.4719) (0.3054) (0.2847) (0.1834) (0.0165) (0.0094)
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