Text-based analysis of corporate nationalism and dividend policies in China

Abstract

This study builds on previous research that employs linguistic data from corporate annual reports to measure rhetorical corporate nationalism and examines how its rise within Chinese corporations influences large stock dividends among publicly listed companies. Based on data from Shanghai and Shenzhen A-share companies from 2000 to 2022, the findings indicate that corporate nationalism significantly suppresses large stock dividend activities. Further analysis reveals that four dimensions of nationalism (i.e., national pride, national revival, corporate role, and anti-foreign) significantly constrain large stock dividend distributions. Mechanism analysis demonstrates that corporate nationalism mitigates the speculative nature of large stock dividends by reducing agency risk and improving information transparency. Additionally, heterogeneity analysis shows that the negative impact of corporate nationalism on large stock dividends is more pronounced in firms with high media attention, low audit quality, weak marketization, strong political connections, and high ownership concentration. These findings reflect the influence of corporate nationalism on dividend policies, offering new insights into corporate behavior in a nationalist context.