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Does firms’ rhetorical nationalism obscure stock price informativeness? Evidence from Chinese listed firms

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  • Jin, Tianquan
  • Wang, Jinhai
  • Wu, Yingying

Abstract

Leveraging information asymmetry theory, this study investigates whether rhetorical nationalism in corporate disclosures diminishes firm-specific price informativeness. Analyzing Chinese A-share data from 2010 to 2022, we develop a text-based index of rhetorical nationalism and find that firms employing stronger rhetoric exhibit greater stock price synchronicity. Forward-looking evidence supports an information environment channel: heightened rhetoric is associated with reduced linguistic specificity, increased analyst earnings forecast bias, and fewer negative media reports in the subsequent year, suggesting greater opacity and weaker firm-specific signals. This effect is amplified under stronger political intervention, higher tax incentives, and vaguer disclosure language. Economic consequence tests reveal that rhetorical nationalism undermines long-term firm value by distorting capital market information efficiency. Overall, our findings provide novel insights into the economic implications of political narratives in stock markets, offering a theoretical basis for regulators to refine guidelines for institutional investors and mitigate noise-driven trading in emerging markets.

Suggested Citation

  • Jin, Tianquan & Wang, Jinhai & Wu, Yingying, 2026. "Does firms’ rhetorical nationalism obscure stock price informativeness? Evidence from Chinese listed firms," Research in International Business and Finance, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:riibaf:v:81:y:2026:i:c:s0275531925004611
    DOI: 10.1016/j.ribaf.2025.103205
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