Abstract: Corporate innovation is the result of the joint action of corporate material factor and labor factor allocation, in which labor is the only factor with subjective initiative. This paper analyzes the impact of labor factor on corporate innovation from the perspective of labor investment efficiency. The results show that good labor investment efficiency can promote corporate innovation. The findings of further study show that the promotion effect of good investment efficiency on corporate innovation is more obvious in the enterprises without the support of industrial policies, the enterprises located in areas with poor legal protection, the technology intensive enterprises and the enterprises under fierce industrial competition. And it is through improving corporate internal control level and reducing agency cost that good labor investment efficiency can promote corporate innovation. From the perspective of improving the efficiency of labor investment, this paper provides a new idea to promote corporate innovation and realize national innovation strategy.

Key words: labor investment efficiency, corporate innovation, internal control, agent cost