Tax Refunds, Long‐Term Bank Loans and Firm R&D Intensity: Evidence From Chinese High‐Tech Listed Firms

ABSTRACT This study examines whether realized tax refunds are associated with higher R&D intensity among Chinese high‐tech listed firms, and whether long‐term bank borrowing weakens part of this relationship. Using panel data for 957 A‐share high‐tech firms from 2011 to 2023, we find that tax refunds scaled by total assets are positively associated with firm R&D intensity. The estimates also show that tax refunds are positively associated with long‐term bank loans, while long‐term bank loans are negatively associated with R&D intensity after controlling for firm characteristics, year effects and industry effects. We therefore interpret long‐term borrowing as a potential offsetting channel rather than as definitive causal mediation. Additional mechanism tests suggest that this offset is related to financing structure and financing constraints, and heterogeneity tests show stronger debt‐related crowding‐out patterns among state‐owned, smaller and younger firms. The findings highlight both the innovation‐supporting role of fiscal relief and the importance of credit‐market frictions in shaping its effectiveness.