This paper utilizes the establishment of bankruptcy courts across China since 2019 as a quasi-natural experiment to empirically investigate the impact of judicial specialization reform on corporate short-term loans for long-term investment. The findings reveal that the establishment of bankruptcy courts significantly reduces the extent to which firms engage in short-term loans for long-term investment. Specifically, it reduces corporate debt repayment risk, enabling more access to long-term loans and thereby decreasing reliance on short-term loans for long-term investment. Furthermore, this reform mitigates excessive investment by increasing the risk of control rights transfer and alleviating agency conflicts between shareholders and creditors, ultimately reducing short-term loans for long-term investment. Cross-sectional difference testing shows that the negative impact of bankruptcy court establishment on short-term loans for long-term investment is primarily observed in samples from regions with a stronger rule of law, less intense industry competition, higher corporate bankruptcy risk, and non-state-owned enterprises. Economic consequences indicate that the establishment of bankruptcy courts fosters corporate innovation by reducing short-term loans for long-term investment, specifically enhancing the quality rather than the quantity of innovation. This paper provides empirical evidence for the economic benefits brought by judicial specialization reform and offers a new perspective for understanding and reducing the occurrence of the phenomenon where firms use short-term loans for long-term investment.