This　paper　examines　the　effect　of　fiscal　decentralization　on　levels　and　efficiency　of　corporate　investment.　The　results　indicate　that　as　the　extent　of　local　government　fiscal　decentralization　increases,　the　level　of　new　investment　by　firms　under　their　jurisdiction　rises.　Furthermore,　fiscal　decentralization　has　an　impact　on　corporate　investment　by　aggravating　over-investment　rather　than　alleviating　under-investment,　leading　to　a　situation　whereby　fiscal　decentralization　is　negatively　associated　with　investment　efficiency　at　the　level　of　the　firm.　Finally,　the　impact　of　fiscal　decentralization　on　over-investment,　under-investment　and　investment　efficiency　is　not　different　between　state-owned　enterprises　and　non-state-owned　enterprises,　suggesting　that　economic　leverages　are　the　dominant　government　intervention　measures.　The　findings　imply　that　fiscal　decentralization　is　another　determinant　of　firm-level　investment　and　corporate　investment　efficiency,　which　broadens　the　existing　literature　on　the　economic　consequence　of　fiscal　decentralization,　resulting　in　important　implications　for　policy-making.