Tax Incentives and Debt-Financing Efficiency in Advanced Manufacturing Enterprises: Evidence from Chinese A-Share Listed Firms

Abstract

Advanced manufacturing firms face long investment cycles, high technological uncertainty, and limited pledgeable assets, so the efficiency with which they use debt is central to sustained innovation. This study examines the association between tax incentives and debt-financing efficiency among Chinese A-share listed advanced manufacturing firms. Annual efficiency scores are estimated using an input-oriented CCR data envelopment analysis model, and two-limit Tobit regressions are applied to 16,817 firm-year observations from 2015 to 2025. Tax incentives are measured as tax refunds received relative to operating revenue. The fully controlled coefficient is 0.5549 and the average marginal effect is 0.5039, indicating a significant positive association. Financing-constraint relief accounts for approximately 15.09% of the total association. The relationship is significantly stronger for non-state-owned and high-technology firms, whereas regional and firm-size differences are not statistically significant. Lagged and re-winsorized estimates support the baseline result, but alternative definitions of incentives and efficiency reverse the sign, revealing material measurement sensitivity. The findings suggest that timely tax relief can improve debt allocation, although interpretation should remain associational and conditional on the selected measures.