Abstract: This paper provides a firm-level empirical analysis on the ways in which firm boundaries expansion affects R&D investment using survey data of World Bank about institutional quality of Chinese enterprise operation in 2012. This study finds that: Firm boundaries expansion have significantly negative effect on the propensity of R&D investment. Based on this, this paper further studies the effect of firm boundaries expansion on the R&D investment under different situation. The results show that: the ratio of state-owned, political connection, policy uncertainty and lobbying strengthen the negative effect of firm boundaries on R&D investment, but the level of rule by law has no relief on the negative effect of firm boundaries expansion on R&D investment. In addition, we depict the relationship curve between firm boundaries expansion and R&D investment using generalized propensity score matching method and dose response model, the results show that, firm boundaries expansion have robust negative effects on R&D investment. Our research enriches the understanding of the relationship between organizational form and firm internal resource allocation, it also enrich the understanding of firm R&D investment.