Bilateral political tension and MNEs' corporate rhetorical nationalism in home country: evidence from China

Purpose This study examines how multinational enterprises (MNEs) strategically respond to rising bilateral political tensions by deploying corporate rhetorical nationalism (CRN) in their home-country communications. We investigate whether political tensions prompt Chinese MNEs to increase CRN, identify the conditions under which such strategies become more salient and evaluate their economic consequences. Design/methodology/approach Drawing on institutional duality and stakeholder theory, we conceptualize CRN as a symbolic signal that enables MNEs to navigate competing legitimacy pressures in politicized environments. We assemble a longitudinal dataset of Chinese listed MNEs from 2003 to 2023, combining information on bilateral political relations, firm-level financials and MD&A text data. We employ fixed-effects panel models and moderation analyses to test the hypothesized relationships. Findings We find that heightened bilateral political tensions lead MNEs to increase their use of CRN in home-country disclosures. This relationship is shaped by factors tied to the government, media, consumers and investors. Moreover, CRN is associated with improved domestic market valuation while not impairing performance in host-country subsidiaries, suggesting that it functions as an effective strategy for managing geopolitical legitimacy challenges. Research limitations/implications This study focuses on Chinese listed MNEs, which may limit the generalizability of the findings to firms operating under different institutional configurations. Future research could incorporate cross-country samples or explore alternative forms of symbolic corporate communication in response to geopolitical shifts. Practical implications We offer practical implications regarding how MNEs navigate domestic legitimacy challenges amidst geopolitical conflicts. Originality/value This study advances institutional duality research by theorizing CRN as a distinctive expressive strategy through which MNEs can balance conflicting legitimacy demands under geopolitical tension. By integrating institutional theory with stakeholder theory, we highlight how firms exercise rhetorical agency and identify the boundary conditions that amplify or constrain such signaling. Our findings also demonstrate that CRN delivers measurable strategic value, offering MNEs a flexible way to maintain legitimacy amid escalating political conflict.