Abstract: Private enterprise investment efficiency is the important basis of the company’s future cash flows and business growth.Unlike the private listed companies in developed countries, China’s private enterprise grow up from a special environment,and are currently continuing to grow and have become a major economic power of China’s economic growth,but there are also non efficiency investment issues.Compared with the state-owned enterprises,it is natural weak in bank financing,which inevitably hampered their investment behavior.So,banking relationships become a non-institutional arrangement to replace official system,to seek more bank loans for their lack of funds in the construction.Meanwhile,because the prevalence of agency costs,equity incentive of private enterprises demands more intense,but the private enterprises in the implementation of equity incentive process also encounter some problems,leading to the generation of excessive investment behavior.Therefore,from internal and external corporate governance mechanism,combined with China’s current financial environment and corporate governance structure,to study the relationship between the bank background,the equity incentive and the efficiency of investment of private enterprises,would help us to find the way to improve the efficiency of investment behavior of private enterprises.

Key words: banking relationships, equity incentive, private enterprise, inefficient investment behavior