From innovation failure to high-quality innovation: the role of resilience in Chinese firms

Owing to the stigma attached to negative outcomes, technological innovation failure tends to provoke organizational aversion, and firms often respond defensively rather than constructively. As a consequence, the question of how such failures influence high-quality innovation has attracted limited scholarly scrutiny, leaving both theory and managerial practice with an incomplete understanding of the post-failure innovation process. Drawing on a sample of China’s listed manufacturing firms, this study empirically investigates the counterintuitive relationship between technological innovation failure and high-quality innovation. Contrary to conventional assumptions, our analysis shows that technological innovation failure does not hinder high-quality innovation; instead, it actively promotes it by strengthening firm innovation resilience. This finding suggests that failure can function as a catalyst for organizational learning and adaptive capability, enabling firms to reallocate attention, revise innovation routines, and pursue more substantive innovation outcomes. Heterogeneity analyses further reveal pronounced differential effects: in the aftermath of failure, state-owned firms achieve higher innovation quality than non-state-owned firms, small and medium-sized enterprises outperform large ones, and firms located in western regions surpass those in eastern and central regions. These differences indicate that the innovation consequences of failure are contingent on ownership structure, firm size, and regional institutional context. This study aims to offer both a theoretical basis and a practical decision-making reference for firms seeking to manage technological innovation failure constructively, build innovation resilience, and advance high-quality innovation.