Abstract:This paper uses the bilateral stochastic frontier model to integrate financing constraints and FDI into a unified framework, analyzes the positive and negative effects of financing constraints and FDI on enterprise innovation, and further compares the effects of financing constraints and FDI on enterprise innovation, in order to provide evidence for easing financing constraints and promoting enterprise innovation. The conclusions are as follows: the results of bilateral estimation show that financing constraints reduce enterprise innovation, while FDI promotes enterprise innovation by alleviating enterprise financing constraints; comparing the two effects, we find that the role of FDI in alleviating financing constraints is greater than that of financing constraints in inhibiting innovation; on the whole, the positive role of FDI is greater than the negative role of financing constraints, which is conducive to enterprise innovation. The heterogeneity analysis of financial development and opening to the outside world shows that the higher the level of financial development, the higher the level of opening to the outside world, the less the negative effect of financing constraints, the greater the positive effect of FDI, and the stronger the role of promoting enterprise innovation.