| Abstract | In this paper, we use high-tech industry companies which listed in Shanghai and Shenzhen Stock Exchange from 2006-2012 as our research sample, selecting one important external uncertainty factor which is corporate litigation risk and we use litigation times and litigation amount to measure it, then we compare the different effects on innovation input which is caused by capital litigation and product litigation. What’s more, we further examine the effects of judicial local protectionism between corporate litigation risk and enterprise innovation input. This study finds: (1) Capital litigation has negative inhibitory effect on enterprise innovation input. In contrast, product litigation has a positive incentive effect on firm innovation input; (2) Overall, the judicial local protectionism distorted outcomes of the corporate litigations and further restrain the innovation input. Specifically, judicial local protectionism will not only greatly intensify the inhibitory effect which caused by capital litigation on respondent enterprise, but also significantly weaken the incentive effect which caused by product litigation on respondent enterprises innovation input. As a conclusion, this paper not only reveals the uncertainty of external environment influence mechanism on enterprise innovation, but also provides a theoretical support to develop innovation investment smoothing mechanism for enterprise managers and decision makers. From the national perspective, we provide empirical evidences for promoting China’s nationalization judicial reform and realize judicial justice. Last but not least, it gives support for driving an innovation oriented country. |