Abstract: This paper uses the Shanghai and Shenzhen A-share listed companies from 2009 to 2015 as a sample to verify the impact of customer relationship transactions on executive pay-performance sensitivity and investment efficiency. The results of the study show that the relationship-based transactions of customers will significantly reduce the executive pay-performance sensitivity, and this effect will significantly increase the company's inefficient investment, which not only promotes excessive investment but also exacerbates insufficient investment. Further inspections distinguishing the nature of property rights and differences in the external environment find that the increase in customer relationship transactions significantly reduces executive pay-performance sensitivity in both state-owned and non-state-owned enterprises, but the reduction effect on non-state-owned enterprises is significantly greater than that on state-owned enterprises; customers relational transactions reducing executive pay-performance sensitivity will significantly increase such inefficient investment, as over-investment by state-owned companies and under-investment by non-state-owned companies. The effect of customer relationship transactions significantly reducing executive pay-performance sensitivity exists in both the higher and lower environmental uncertainty groups, but the effect is larger in the lower environmental uncertainty groups; The reduced executive pay-performance sensitivity will significantly increase the under-investment of companies with higher environmental uncertainty. However, for companies with lower environmental uncertainty, this negative effect is suppressed.

Key words: customer relationship transaction, executive pay-performance sensitivity, inefficient investment, the nature of ownership, environmental uncertainty