Abstract
The purpose of the research is to examine the importance of financial rewards and managers’ motivations, including sustainable investment projects. For that, the role of financial motivation for managers is analysed to understand strategic priorities for sustainable investment policies. Panel data for non-financial listed companies in China are used to determine the best-fit values of the proposed model, and the results of the Lagrange multiplier (LM) and Hausman tests are discussed for sustainable investment strategies. The results demonstrate that both low-paid and highly-paid managers in valuable project firms tend to be conservative and that managers consolidate their positions through underinvestment. This finding is clear evidence that managers are reluctant to take a risk on sustainable investment strategies. However, highly-paid managers of non-valuable project firms are generally willing to obtain high productivity through advanced technologies. The results are also generalized for strategies that are related to project managers’ financial motivation to increase the efficiency of sustainable investment decisions.
Highlights
Investment decisions are among the most prominent issues for sustainable project management
Through the mathematical inference presented in Appendix B, we find that the best investment level is lower than the optimal investment level and should be (Igf ∗ < I∗g)
We empirically investigate the relative magnitudes of firms’ under- and overinvestment caused by managerial pay levels
Summary
Investment decisions are among the most prominent issues for sustainable project management. Several debates on successful project selection include financial and non-financial conditions. Financial issues generally address macroeconomic factors and the budgeting of the target market. The non-financial component is a set of qualitative factors with behavioural financing. Whereas owner and manager conflicts persist, there are many novelties in constructing investment policies in the competitive market environment [1,2,3]. The rewards of increasing managerial success are among the best tools for sustainable business results [4], and the personal motivation and personalities of managers could promote valuable projects for long-term business success [5]
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