Factors influencing managers’ environmental investment decisions: an empirical examination in the Australian offshore oil and gas industry

Abstract

The purpose of this paper is to investigate the effects on environmental investment decision-making of: a firm’s regulatory climate, and information strategy. In a between participant 2 x 2 design, professional managers were randomly assigned to two of the four conditions of a fictitious company’s regulatory climate (coercive government regulatory or industry selfregulatory climate) and information strategy (conventional accounting information or environmental accounting information). Managers from a sample of 52 offshore oil and gas companies in Australia were involved in the experiment. The study results find that both regulatory climate and information strategy have strong main effects on managers’ environmental investment decision. However, contrary to the literature, these two variables have not shown any interaction effect on managers’ environmental investment decision. The findings of this study are important to businesses and policy makers as they provide empirical evidence of the relative efficacy of environmental regulation and information strategy.