This paper addresses a critical gap in upper echelons literature by examining the impact of executives’ national identity on strategic decision-making. Focusing on CEOs of firms targeted for an acquisition, we develop and test a theory that explains how the strength of a CEO’s national identity influences the choice between selling a firm to foreign or domestic acquirers. Drawing on social and political psychology insights, we argue that CEOs with a strong national identity are less likely to support the firm's sale to foreign acquirers due to heightened feelings of threat and unease when considering the prospect of target firms becoming foreign assets. Analyzing 1,577 acquisitions of public US firms, we find a significant negative relationship between CEO national identity strength and the likelihood of selling to foreign acquirers, particularly in highly regulated industries. This study contributes to the understanding of CEOs’ influence on strategic decisions, extends research on social identity, and advances the literature on acquisitions.
