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<p>Technological innovation uncertainty is vital for sustainable enterprise development but often exacerbates agency problems due to conflicting goals between shareholders and managers. Shareholders prioritize long-term growth, while managers focus on short-term metrics and risk aversion, leading to hesitation in uncertain investments. This study expands on Andrikopoulos' (2009) model by incorporating factors such as growth uncertainty, debt-financing constraints, and managerial compensation. The findings show that managerial compensation increases investment triggers and delays decisions, while debt-financing constraints lower both investment triggers and optimal leverage. A U-shaped relationship between uncertainty and investment thresholds suggests that uncertainty can positively impact firms. These insights provide strategies to optimize investment decisions and align managerial and shareholder interests.</p>

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Optimizing investment strategies: unraveling the interplay of managerial discretion, debt constraints, and growth uncertainty

  • 期刊论文

  • 发表日期：

    2025年6月5日

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  • Yu-Hong Liu,
  • I-Ming Jiang,
  • Mao-Wei Hung,
  • Kuan-Miao Hou

摘要

Technological innovation uncertainty is vital for sustainable enterprise development but often exacerbates agency problems due to conflicting goals between shareholders and managers. Shareholders prioritize long-term growth, while managers focus on short-term metrics and risk aversion, leading to hesitation in uncertain investments. This study expands on Andrikopoulos' (2009) model by incorporating factors such as growth uncertainty, debt-financing constraints, and managerial compensation. The findings show that managerial compensation increases investment triggers and delays decisions, while debt-financing constraints lower both investment triggers and optimal leverage. A U-shaped relationship between uncertainty and investment thresholds suggests that uncertainty can positively impact firms. These insights provide strategies to optimize investment decisions and align managerial and shareholder interests.