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The Impact of the VAT Credit Refund Policy on the Cash Flow of A-Share Listed Manufacturing SMEs

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  • Xun Zhu

    (Minjiang University)

Abstract

Manufacturing SMEs are crucial for stabilizing industrial chains and employment, but face persistent cash flow constraints. As the VAT credit refund policy becomes normalized, its alleviating effect has garnered attention. This paper examines 2019–2024 A-share listed manufacturing SMEs using the difference-in-differences method. The results show the policy significantly improves operating cash flow, increasing the net operating cash flow to total assets ratio by 0.9 percentage points on average. The effect operates through dual channels—easing financing constraints and enhancing operational efficiency—with the latter being more impactful. The policy effect is persistent and more pronounced for high-profitability firms, while showing no significant heterogeneity across firm size or financial risk. Targeted recommendations from governmental and corporate perspectives are proposed to refine policy effectiveness and support manufacturing SMEs’ development.

Suggested Citation

  • Xun Zhu, 2026. "The Impact of the VAT Credit Refund Policy on the Cash Flow of A-Share Listed Manufacturing SMEs," Advances in Economics, Business and Management Research,, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6239-672-2_31
    DOI: 10.2991/978-94-6239-672-2_31
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