How Sector-Specific Value-Added Tax Incentives Empower Enterprise Development: Evidence from the Expansion of the Additional VAT Credit Policy

Constraints arising from the tight fiscal balance necessitate improvements to the mechanisms through which tax incentives support key areas. Following the expansion of the additional value-added tax (VAT) credit policy in 2023, its core orientation shifted toward providing targeted support for the development of key industries. This policy innovation is extremely rare in the history of VAT worldwide, making a systematic evaluation of its implementation effects necessary. Taking the extension of this policy to advanced manufacturing as its point of departure and drawing on manually compiled information from listed companies' annual reports, this paper empirically examines its impact on enterprise value, the underlying mechanisms, and the characteristics of its effects. The findings show that the additional VAT credit policy significantly increases the value of advanced manufacturing enterprises. This effect operates primarily through three channels: a direct cash-flow effect, a production-factor allocation effect, and an effect that alleviates financing constraints. Further analysis indicates that firms' positions in the industrial chain and the characteristics of their industries influence the policy's implementation effects, while dynamic adjustments to firms included on the policy list produce qualification-tiering and threshold-screening effects. This paper deepens the understanding of the operating logic and inherent regularities of the VAT system, helps promote the optimization and adjustment of sector-specific VAT incentive policies within a framework of fiscal sustainability, and provides support for the development of strategically important industries.