The Contingent Effect of Patriotic Rhetoric on Firm Performance

Drawing on resource-dependence logic, we frame a firm’s use of patriotic rhetoric as a strategy for absorbing external resource constraints. We argue that strong nationalist sentiment positively influences the performance effect of using patriotic rhetoric, whereas a firm’s involvement in overseas markets negatively influences this effect. To test our hypotheses, we capture U.S. firms’ patriotic rhetoric using earnings calls and press releases for 456 firms in the S&P 500 during the period 2002−2015. We find that the effect of using patriotic rhetoric on performance is more positive under conditions of high levels of nationalist sentiment in the home country and more negative for firms that are highly involved in overseas markets.