Determinants of UNGC Adoption: The Role of Financial Performance, Corporate Governance, and Peer UNGC Adoption.
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2025-07-08
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en
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The United Nations Global Compact (UNGC) was introduced 25 years ago, and it is widely considered as one of the largest voluntary corporate responsible initiatives. Existing literature has explored different perspectives on UNGC and suggest that its adoption rates vary significantly across firms, sectors and regions and motivations behind adoption are not always clear (Arevalo et al., 2013). However, empirical analysis about the determining factors remains underexplored, particularly from a multi-level perspective. This thesis empirically examines how financial performance, corporate governance characteristics, and mimetic sectoral pressures drive UNGC adoption. The analysis employs panel logistic regression on a global dataset from 2021 to 2024 extracted from the LSEG database, covering 69 countries and 4,453 unique firms. The study applies lagged independent variables to capture the delayed effect of these predictors on UNGC and to prevent simultaneity bias. Additionally, robustness checks were performed to evaluate the consistency of the findings. The results show that board diversity, board independence and return on assets are positively associated with adoption, although its influence varies depending on the country-context. Mimetic pressures within sectors also significantly drive firms towards participation and is robust. These findings suggest that institutional context and firm-specific characteristics jointly shape sustainability commitments.
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Faculteit der Managementwetenschappen