Abstract: Financing constraints and agency costs may lead to inefficient innovation investment of enterprises. By constructing a two-tier heterogeneity stochastic frontier model，this paper quantitatively examines the deviation direction and degree of inefficient innovation investment of listed companies based on the data of six central provinces from financing constraints and agency costs. The results show that: overall, the lower bias effect of financing constraints is stronger than the higher bias effect of agency costs on the inefficient innovation investment of listed companies, and the net effect is that the innovation investment is insufficient; the heterogeneity of corporate innovation investment is strong, compared with private enterprises, underinvestment of central state-owned enterprises is weak, the shortage of innovation investment in local state-owned enterprises is the most serious, and the “credit discrimination” of private enterprise innovation has not been improved significantly; the degree of underinvestment in large-scale corporate innovation is declining, and the degree of underinvestment in innovation by small-scale companies tends to increase gradually. Therefore, we should reform financial system to reduce the financing constraints of external bank credit on R&D of private enterprises and small-scale enterprises, and reduce the agency costs of central state-owned enterprises so as to avoid excessive investment in innovation.

Key words: inefficient innovation investment, financing constraints, agency costs