Abstract: Labor capital is an indispensable resource factor in the process of enterprise production and operation. Optimizing the allocation of labor resources is of great significance for micro-enterprises to maintain competitiveness and for macroeconomic high-quality development. This study, based on the sample of A-share listed companies from 2008 to 2020, empirically examines the influence of executives’ hometown affiliation on the efficiency of labor investment in enterprises and its mechanisms. The research indicates that local executives can significantly improve the efficiency of labor investment in enterprises. Mechanism analysis shows that reducing external environmental uncertainty and alleviating agency conflicts are the main pathways through which local executives enhance the efficiency of labor investment in enterprises. Heterogeneity analysis demonstrates that the promotion effect of local executives on the efficiency of labor investment in enterprises is influenced by the characteristics of micro-enterprises, medium-sized markets, and macro-environment. Economic consequence analysis suggests that optimizing the allocation of labor resources by local executives helps reduce enterprises’ excessive employment and significantly inhibits the stickiness of labor costs. This study expands the literature on factors influencing enterprise labor investment efficiency from the micro perspective of executive local background, providing new evidence support for enterprises in recruiting high-level talents and optimizing labor resource allocation.

Key words: factor optimization allocation, local executives, labor investment efficiency