Abstract: Manufacturing industry in China has effectively improved its productivity by taking advantage of late-developing during the past two decades. However, the future space for productivity gains through technology import and re-innovation after digesting and the Late-developing Advantage are keeping shrinking due to the technological convergence in manufacturing industry between China and developed countries. Therefore, motivating the firms possessing leading technology to conduct break-through technological innovation and inspiring the promotion and application of appropriate advanced technology among technological laggard firms have been the current research focus of technological innovation. This paper analyses the impact of various financing channels on firms’ innovation investment decisions from the perspective of enterprise capital structure, and then examines the adjustment of the impact owing to different innovation stages that firms belong to. The result shows that: 1) equity financing has a positive incentive effect on innovation investment, especially for firms at the higher innovation stages; 2) debt financing is able to effectively encourage the manufacturers at the lower innovation stages to investment in technological innovation; 3) working capital has a significant smoothing effect on enterprise R&D investment with an exception of firms at “technology-creation stage”. Finally, some relevant policy recommendations are put forward.