Abstract: This paper takes the data of listed companies in China from 2000 to 2017 as a sample, and studies the relationship and mechanism between enterprise leverage and total factor productivity (TFP) by constructing a mediation effect model. The research shows that: (1) enterprise debt leverage has a significant negative impact on TFP in general, but short-term leverage is more harmful to TFP than long-term leverage; (2) enterprise debt leverage will adversely affect the future TFP by increasing financial costs, reducing capital efficiency and labor efficiency; (3) Large-scale enterprises, state-owned enterprises, and companies with high financing constraints are more affected by debt leverage.

Key words: corporate debt leverage, total factor productivity, financial cost, capital utilization efficiency, labor utilization efficiency