The Impact of the Act for the Development of Biotech and New Pharmaceuticals Industry on Operating Performance

• Main Authors: Wu, Chia-Hsin, 吳佳芯
• Other Authors: Liang, Woan-Lih
• Format: Others
• Language: en_US
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/h7m5mb

碩士 === 國立交通大學 === 財務金融研究所 === 107 === This study examines the impact of the Act for the Development of Biotech and New Pharmaceutical Industry, which was enacted in 2007. We explore the change in the operating performance (ROA, ROE, and, ROS) of the biotech industry and high-tech industry. We select a total of 18,065 firm-year including the listed firms of the biotech industry and high-tech industry from the period between 2002 and 2017. In our paper, we first find the control firms for the treated firms by using propensity score matching (PSM). Then, we use the difference-in-difference method and OLS regression to explore the influence of the Act. On the part of intra-industry, the results are consistent to show that only ROA of approved companies has a significant increase after they obtained the benefit from the Act. In the subsample analysis, we find that the significances of the increasing ROA come from the small-sized firms and pharmaceutical firms. Compared to the high-tech industry, the ROA and ROS of the biotech firms are significantly improved after the Act enacted. In addition, we find that the significances of ROA are from the medium-sized firms instead of small- or large-sized firms. In short, from the operating performance perspective, there is evidence to suggest that the Biotech Act is an effective policy to foster the development of the biotech industry.