Abstract: By assessing investment efficiency based on SFA model and path analysis method,this paper mainly studies major stockholder controlling and corporate governance mechanism,especially their interactive effect on efficiency of investment.The empirical result shows that major stockholder controlling not only has a positive impact on efficiency of investment,but also has a negative impact on efficiency of investment.Overall efficiency of China's stock market is no efficient.The main reason is that the major stockholder controlling has a negative impacton efficiency of investment through ratio of independent directors and capital structure.So it is suggested that all corporate gover nance mechanisms must be perfected.

Key words: major stockholder controlling, investment efficiency, SFA, path analysis