What Firms Leave Multi-Stakeholder Initiatives?:An Analysis of Delistings From the UN Global Compact

Abstract

This study analyzes which firms leave multi-stakeholder initiatives (MSIs) for corporate social responsibility. Based on an analysis of all active and delisted participants from the UN Global Compact between 2000 and 2015 (n= 15,853), we find that SMEs are more likely to be delisted than larger and publicly-listed firms; that early adopters face a higher risk of being delisted; and that the presence of a local network in a country reduces the likelihood of being delisted. We theorize that MSIs face a participant self-selection bias over time and that local networks enable legitimacy spillover effects that prevent firms from exiting.

This study analyzes which firms leave multi-stakeholder initiatives (MSIs) for corporate social responsibility. Based on an analysis of all active and delisted participants from the UN Global Compact between 2000 and 2015 (n= 15,853), we find that SMEs are more likely to be delisted than larger and publicly-listed firms; that early adopters face a higher risk of being delisted; and that the presence of a local network in a country reduces the likelihood of being delisted. We theorize that MSIs face a participant self-selection bias over time and that local networks enable legitimacy spillover effects that prevent firms from exiting.