Abstract: This paper has established a model that ultimate controlling shareholders influence the corporate investment behavior by expanding LLSV model.Our results indicate when the ultimate controlling shareholders figure for private benefit of control, the tunneling cost is small, the investor protection is bad, and the ultimate controlling shareholders will process over-investment.But debt financing can heighten the cutoff point of ultimate controlling shareholders'investment and suppress ultimate controlling shareholders' over-investment.

Key words: LLSV model, ultimate controlling shareholders, debt financing, over-investment