It is well known that market value becomes increasingly critical after the non-tradable share reform. Nevertheless,systematic discussion on the effect of market value management on business operation is still scarce. Based on the sample of listed firms in A share market during the period of2006 to 2016,this research investigates the effect of market value management on the investment decisions and its mechanism. Firstly,we provide evidence that market value management increases the investment expenditures of firms in next period. Such effect is more pronounced in the subsample of NSOEs,high growth firms and bear market. Secondly, market value management increases investment expenditures through alleviating financial constrain of firms. Furthermore,we find that market value management may lead to inefficiency in the investment decisions of firms. Specially,market value management may result in over investment. This paper contributes to the existing literature by examining the relationship between market value management and business operations firstly,which provides remarkable evidence for understanding the impact of market value management and the mechanism of such impact.