Through　an　analysis　of　survey　data　gathered　from　private　firms　in　China,　this　study　examines　the　impact　of　employee　protection　on　corporate　innovation　ability.　The　results　indicate　that　firms　with　more　advanced　employee　protection　have　stronger　innovation　ability.　Furthermore,　the　positive　relationship　between　employee　protection　and　corporate　innovation　ability　is　more　pronounced　in　those　enterprises　with　labor　unions.　Finally,　a　firm＇s　political　connections　strengthen　the　influence　of　employee　protection　on　corporate　innovation.　These　empirical　findings　highlight　the　positive　consolidating　effects　of　labor　unions　and　political　connections　and　will　be　of　value　to　policy　makers　in　emerging　markets　in　gauging　the　important　drivers　of　corporate　innovation　ability.