Green investments, training costs and performance-related pay: differences between small and large firms

This paper analyzes the effect of green investment on workplace training and performance-related pay in small businesses. At this aim, we take advantage of microdata from a large representative survey of Italian firms. Using different econometrics models, we find the following results. First, the amount of expenditures on green technologies increases the probability of Performance-related pay, especially in large firms, although a positive effect is also found in small ones. Conversely, green expenditure significantly increases the amount of training investment in small firms, while no effect is found in larger ones. Further, we show that different green technologies affect performance-related pay and training investments according to the firm’s size. These findings are robust to unobserved heterogeneity and endogeneity concerns. Finally, we discuss policy implications.