Join In... and Drop Out? Firm Adoption of and Disengagement from Voluntary Environmental Programs.

Voluntary environmental programs offer opportunities for policy-makers, corporate stakeholders, and firms themselves to improve environmental outcomes valued by the public without resorting to regulatory mandates. Prior research has addressed a range of antecedents for a broad array of voluntary programs, enhancing knowledge of how stakeholders engage firms on substantive issues of public importance, and clarifying how firms leverage program participation to enhance firm outcomes. However, adoption of programs by firms is dynamic, and stagnant or declining participation rates may threaten program longevity when firms do not realize the net benefits expected at time of adoption. While successful voluntary programs are often mutually beneficial for firms and stakeholders, we find that prior literature has not sufficiently addressed the factors that compel firms to drop out. This study uses survival analysis to determine the drivers of firm disengagement from a prominent voluntary environmental program. Findings indicate that firm transparency is a powerful commitment device driving sustained firm participation, and that evaluative ratings of the quality of participation motivates top performers in high-impact industries to maintain adoption. Our study contributes to theory on stakeholder management and voluntary program participation, while offering guidance on institutional design of programs for long-term performance. [ABSTRACT FROM AUTHOR]