The Chinese market economy is still at its first stage;furthermore,the ownership structure of most corporate is not reasonable at all. Corporate over-investment has become one of the main causes which restrain the development of Chinese listed companies. The empirical research on over-investment of Chinese listed companies proves that,companies with plenty of free cash flow are more incline to over-investment. The over-investment condition of Chinese listed companies aggravates with the increase of the big shareholder holding percent. The increase of institutional investors holding percent does not mitigate but aggravate the over-investment condition of Chinese listed companies.