Abstract: Based on the bilateral stochastic frontier model, this paper studies the financing restraint effect, the agent cost effect and the net effect in the investment spending of the listed companies in the strategic emerging industries. The empirical results show that both financing constraints and agency costs have significant impacts on the investment expenditure of listed companies in the strategic emerging industries, while the impact of agency costs on the investment spending is slightly higher than the financing constraints. The annual effect suggests that over the past five years, the degree of excessive investment in China’s listed companies in the strategic emerging industries has no significant changes. By analyzing the empirical results, it is found that the increase of cash flow has not relieved but increased the financial constraints faced by listed companies; while owning more corporate free cash flow would cause more significant agent problems. Besides, among the listed companies of different scales there are some differences in the degree of excessive investment, which is reflected in the fact that the degree of excessive investment of small-scale companies is greater than that of the large-scale companies. Meanwhile, the pressure of external financing constraints did not improve the excessive investment in China’s listed companies in the strategic emerging industries. In order to guarantee the high efficiency of the government in supporting the strategic emerging industries, it is necessary for the government to reduce appropriately their intervention, establish perfect industrial standards, formulate the scientific and reasonable supporting policies, and give full play to the function of market supervision and external correcting.

Key words: strategic emerging industry; financing constraints; agency cost; bilateral stochastic frontier model