slowmover,
Timing advances (almost always) increases engine thermodynamic efficiency--both transient & steady-state. There's not really any mystery about that. You can get the information from any basic engine textbook.
There are 2 warnings, however, about advancing timing.
1) If you take it to an extreme, it is possible to advance the timing too far. When this happens your FE will come back down. You'll also start getting black smoke. Back in the day (before we had to worry about NOx emissons) a rule of thumb for setting the timing was to advance it as much as you could until you started getting black smoke.
2) Be very careful about advancing the tuming significantly if you're going to be running at high loads (heavy towing, etc.). Advanced timing increases peak cylinder pressures. This helps your FE, but if you go too far you can cause mechanical damage. If you're not pushing the engine you don't have to worry about it because the cylinder pressures aren't anywhere near the limit.
FYI, I've done diesel tuning for years and if you want to increase FE the easiest thing to do (tuning-wise) is to advance the timing. Engine manufactures can't advance the timing that much anymore because the NOx emissions also go up.
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Here's a simple graph from an old research paper:
http://www.oliverdiesel.com/referenc...tiontiming.jpg