Abstract
This article comprehensively examines the influence and mechanism of corporate litigation experience on the innovation quality of Chinese-listed non-financial firms in the Shanghai and Shenzhen stock markets from 2004 to 2020. The article finds that corporate litigation experience in China promotes higher innovation quality, a conclusion that remains robust after a series of robustness tests. This effect is stronger when enterprises engage in legal disputes with domestic firms, experience patent litigation, and act as plaintiffs. Mechanism tests reveal that corporate litigation experience encourages firms to implement strategic corporate social responsibility (CSR) to leverage the reputation insurance effect, thereby enhancing innovation quality. Furthermore, we find that moderate stability in the top management team (TMT) strengthens the innovation effect of corporate litigation experience. This article provides policy implications for promoting organizational management practices, dispute resolution, and internal innovation within firms.