Managerial Nationalism and Firm Innovation: Social Identity Perspective

Although nationalism is traditionally studied by political scientists, previous studies focus solely on the outcomes of nationalism, neglecting the theoretical mechanisms by which managerial nationalism shapes firm behaviour and leaving key gaps unaddressed. We highlight its importance to management scholars by exploring how the national sentiment of decision makers can influence their strategic decisions. We textually analyse management's discussion and analysis in annual reports to construct a managerial nationalism indicator. Using a sample of A‐share manufacturing firms listed from 2007 to 2022, we examine how managerial nationalism influences firm innovation based on social identity theory. Results show that managerial nationalism positively affects firm innovation, and the impact is strong in state‐owned enterprises, which are firms that benefit from industrial policy support and those in regions with strong Confucian cultural influence. Further analysis reveals that managerial nationalism promotes innovation by increasing the number of highly skilled talents and encouraging intelligent investment. The findings suggest that the integration of nationalism into corporate culture can drive long‐term growth and increase firm competitiveness.