Abstract: Abstract: Based on the causation of the capital investment driven by the private benefit of control, an inefficient investment behavior model leaded by the insider snatching private benefit of control is constructed under a uniform two-tiered analysis frame. By expanding the model, the investigative results are gained. (1)The branch inefficacy in the corporation drives the motivation that snatches private benefit of control for increasing profitable option; (2)Under the absence of state property right and the prominent insider control in the corporation governance structure, the fact that uses capital by the state proxy to compensate the exterior option of private benefit of control leads to the overinvestment behavior due to the coherence of private benefit between controller and manager, the inefficacy of stock ownership incentive mechanism, and the rigidity of salary management; (3)The mutual effect of the snatching private benefit and compensating behavior causes not only the overinvestment ,but also the extrusion effect of capital allocation between the efficient branch and the inefficient branch.

Key words: private benefit of control, capital investment, extrusion effect