Patent infringement litigation, executive team risk appetite and corporate innovation

Abstract

ABSTRACT Comprehensively deepening the trial mechanism of patent infringement litigation is important for optimizing law environment for scientific and technological innovation. However, the growing frequency for patent infringement lawsuits significantly impacts the corporate innovation. The existing literature focuses on the direct relationship between patent infringement litigation and corporate innovation without exploring the mechanisms. Based on this, this paper analyzed the effect between patent infringement litigation and innovation and heterogeneity using a fixed effects model on the theoretical model basis. The study found that patent infringement litigation has a positive impact on innovation investment; patent infringement litigation promotes innovative activity through foreign direct investment; executive team risk appetite negatively moderates the relationship between patent infringement litigation and firms’ innovation investment. Patent infringement litigation has a more significant incentive effect on the innovation activities of state-owned enterprises, more open regions, and in the northeast and east regions. This paper not only reveals the mechanism that judicial litigation affects innovation activities but also provides a reference basis to solve patent disputes.