Parallel trend and dynamic effects
Dep. var. = | (1) | (2) | (3) | (4) |
|---|---|---|---|---|
| PDIFF1 | PDIFF2 | PDIFF1 | PDIFF2 | |
| TREAT × Period(−2) | −0.0019 (−0.43) | −0.0011 (−0.21) | −0.0034 (−0.74) | −0.0026 (−0.52) |
| TREAT × Period(−1) | −0.0067 (−1.31) | −0.0057 (−1.00) | −0.0073 (−1.43) | −0.0064 (−1.13) |
| TREAT × Period(0) | −0.0095* (−1.84) | −0.0091 (−1.59) | −0.0100** (−1.99) | −0.0098* (−1.73) |
| TREAT × Period(1) | −0.0131** (−2.16) | −0.0124* (−1.84) | −0.0128** (−2.15) | −0.0122* (−1.84) |
| TREAT × Period(2) | −0.0172*** (−2.59) | −0.0190** (−2.57) | −0.0161** (−2.49) | −0.0178** (−2.48) |
| Firm-level controls | No | No | Yes | Yes |
| Period indicators | Yes | Yes | Yes | Yes |
| Year fixed effects | Yes | Yes | Yes | Yes |
| Firm fixed effects | Yes | Yes | Yes | Yes |
| N | 17,218 | 17,218 | 17,218 | 17,218 |
| Adjusted R2 | 0.709 | 0.689 | 0.713 | 0.694 |
| (1) | (2) | (3) | (4) | |
|---|---|---|---|---|
| PDIFF1 | PDIFF2 | PDIFF1 | PDIFF2 | |
| −0.0019 (−0.43) | −0.0011 (−0.21) | −0.0034 (−0.74) | −0.0026 (−0.52) | |
| −0.0067 (−1.31) | −0.0057 (−1.00) | −0.0073 (−1.43) | −0.0064 (−1.13) | |
| −0.0095* (−1.84) | −0.0091 (−1.59) | −0.0100** (−1.99) | −0.0098* (−1.73) | |
| −0.0131** (−2.16) | −0.0124* (−1.84) | −0.0128** (−2.15) | −0.0122* (−1.84) | |
| −0.0172*** (−2.59) | −0.0190** (−2.57) | −0.0161** (−2.49) | −0.0178** (−2.48) | |
| Firm-level controls | No | No | Yes | Yes |
| Period indicators | Yes | Yes | Yes | Yes |
| Year fixed effects | Yes | Yes | Yes | Yes |
| Firm fixed effects | Yes | Yes | Yes | Yes |
| 17,218 | 17,218 | 17,218 | 17,218 | |
| Adjusted | 0.709 | 0.689 | 0.713 | 0.694 |
Note(s): This table tests the parallel trend assumption and dynamic effects of government subsidy. The dependent variables represent one of our measures of product differentiation. The dummy variable TREAT equals 1 for treatment firms and 0 for control firms. The period indicator Period(x) equals 1 in year t + x and 0 otherwise, where year t is the year of receiving a government subsidy. The model includes firm and year fixed effects and firm-level control variables. All continuous variables are winsorized at the 1st and 99th percentiles. Presented in the parentheses below each coefficient is the t-value based on standard errors clustered by firm. Constant terms are estimated but omitted for presentation. ***, ** and * represent statistical significance at the 1, 5 and 10% levels, respectively
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