In this paper，we frame two theoretical models in concentrated ownership environments to study the determinants on tunneling and managerial entrenchment． We find that: ( 1) When there are only agency prob-lems between controlling shareholder and minority shareholders in a firm，better investment opportunities， higher legal investor protection，and higher ownership by controlling shareholder will result in less tunneling．( 2) When there are dual principal-agent problems in a firm，better knowledgeable of controlling shareholder higher legal investor protection，and higher ownership by controlling shareholder will result in lower probability and lower extent of tunneling． ( 3) When there are dual principal-agent problems in a firm，better investment opportunities，higher legal investor protection，and higher pay-performance sensitivity will result in lower prob-ability and lower extent of managerial entrenchment．