We explore the association between small and medium business and investment decision. Specifically, we empirically examine whether small and medium business shows different level of investment efficiency relative to other firms. Our result indicates that small and medium business, when compared to other firms, shows lower investment efficiency so that small and medium business exhibits less potential for long-term growth. Thus, based on this finding, we conclude that the relative lack of investment funds and specialties in investment areas is the primary source of poor investment efficiency of the small and medium business, since such elements are the core inputs when enhancing firms’ investment efficiency. Given the importance of small and medium business in the economy, our research might provide useful implications to the policy makers.