Abstract: Abstract: By introducing two mediators which are financing constraints and agency problem, we include financial flexibility and inefficient investment into a same research framework. We study the impact path of financial flexibility on under-investment and over-investment on the basis of financing constraints theory and agent theory. Through theoretical analysis and empirical test, we find that the financial flexibility has a significant influence on inefficient investment which has a double-edge. Financial flexibility can not only solve the under-investment of enterprise by alleviating financing constraints, but also lead to over-investment by intensifying agent problem.