Does rhetorical nationalism promote innovation sustainability?

This study examines the impact of rhetorical nationalism on firms’ innovation sustainability and its underlying mechanisms using data from China’s A-share listed companies during 2004-2022. We find that rhetorical nationalism significantly enhances innovation sustainability, a conclusion that remains robust after a series of tests including GMM estimation, Heckman two-stage model, PSM, and random-effects model analyses. Mechanism analysis demonstrates that rhetorical nationalism primarily influences innovation sustainability through two pathways: government support and organizational identity. Heterogeneity analysis further indicates that the positive effect of rhetorical nationalism on innovation sustainability is more pronounced among firms without political ties and those with satisfactory performance.