Abstract: This paper investigates the direct effects of investor valuations on China corporation investments under management short-horizon resulted from stockholder short-horizon.By comparing usual-used market valuation index,marketto-book ratio,with new misprice index,non-equilibrium price,this paper analyzes the effects of investor sentiment on corporate long-turn investment,short-turn investment and total investment under different management short-horizon levels.And it also surveys the mix effects of market misprice and management short-horizon on corporate investment distortion.It concludes that the higher the market misprice is,the more corporation invests,and if the level of management short-horizon is higher,the investment is more sensitive to market valuation.Furthermore,long-turn investments are more sensitive to market valuations expressed by non-equilibrium price,and short-turn investments are more sensitive to market valuations expressed by market-to-book ratio.The latter sensitivity shows that China stock market is not efficient,and market-to-book ratio can reflect investor irrational valuation psychology.

Key words: management short-horizon, market valuation, long-turn investment, short-turn investment