Abstract:In the new stage of high-quality economic development, considerable studies have been conducted on the positive effects of party-building activities on economic entities. However, the mechanism and path transmission of the positive economic effects of party-building activities are still subject to controversy and exploration. This study, based on a new human capital framework, analyzes the mechanism of the impact of party-building activities on economic performance through the allocation of leisure time. The study fi nds that party-building activities within enterprises signifi cantly enhance employees' job performance, and this conclusion still holds after conducting endogenous tests by constructing a "virtual friend circle". Further analysis reveals that party-building activities primarily enhance employees' non-cognitive abilities within leisure time allocation, specifically improving their conscientiousness and agreeableness, thereby enhancing their job performance. This study, thus, provides positive evidence and a basis for decision-making on how party-building activities can enhance the human capital and improve corporate performance in the context of China's national conditions.