Abstract: Conflict between controlling shareholder and minority shareholder,emerging in the form of firm's investment policy,is the two kinds of inefficient investment behaviors due to the controlling shareholder's pursuit of private benefit of control :the over-investment and the investment-deficiency. Considering both the over-investment and investment-deficiency in one framework by setting up models,we study the controlling power allocation and the inefficient investment behaviors in the ownership structure of large shareholder controlling. It is shown that,because of the pursuit of private benefit of control,the two classes of inefficient investment behaviors exist in the investment behaviors of the large shareholder controlling firms. The investment behavior varies with the weight of ownership of the controlling shareholder. Both the balancing and the cooperation between several large shareholders could alleviate the over-investment and aggravate the investment-deficiency,and the effect of cooperation on the inefficient investment behaviors depends on the cost of the cooperation.

Key words: Key words:private benefits of control, large shareholder control, allocation of the control, inefficient investment