From financing relief to governance empowerment: How do government-guided funds activate labor investment efficiency?

Against the dual backdrop of global industrial chain restructuring and high-quality economic transformation, the optimal allocation of labor factors has become key for enterprises to enhance their core competitiveness. Using a dataset of A-share listed companies in the Shanghai and Shenzhen stock markets from 2009 to 2024, this paper empirically examines the impact of government-guided funds on labor investment efficiency. The findings reveal that government-guided funds significantly improve corporate labor investment efficiency, primarily through alleviating financing constraints and enhancing corporate governance. Further analysis indicates that this positive effect exhibits heterogeneity: it is more pronounced in labor-intensive firms, in regions with underdeveloped market mechanisms, and in areas with lower levels of financial development. Moreover, government-guided funds are found to significantly curb both over- and under-investment in labor, particularly by addressing redundant employment and insufficient hiring. Based on these findings, the paper suggests enhancing the operational mechanisms of government-guided funds, optimizing the financial market environment, and strengthening the supervision and management of such funds.