The impact of safety investment on economic performance in listed mining enterprises: An analysis based on the moderating effect of executive compensation incentives

This study examines the impact of safety investment on firm economic performance and the moderating role of executive compensation incentives from a safety accounting perspective, utilizing panel data from Chinese listed mining enterprises spanning the period 2012 to 2024. Based on two-way fixed effects models and supported by instrumental variables, dynamic panel analysis, and robustness tests, the findings reveal: (1) Safety investment significantly enhances economic performance, primarily by reducing accident losses, ensuring production continuity, and improving corporate reputation. (2) Executive monetary compensation positively drives firm performance in China’s mining sector—where equity incentives remain limited—thereby alleviating principal-agent issues. (3) However, compensation incentives negatively moderate the safety investment-performance relationship; high-powered monetary incentives weaken the economic returns on safety investment, supporting the "loss aversion" mechanism in behavioral agency theory. Heterogeneity analyses further show that this moderating effect varies with equity incentive structures and property rights. These results offer new evidence on how incentive contracts may distort resource allocation in high-risk industries. The study suggests that mining firms should strategically reposition safety investment and redesign executive incentives to mitigate short-termism, thereby achieving sustainable economic performance while ensuring safety—crucial for balancing short-term results with long-term development. • Safety investment significantly boosts the economic performance of mining firms. • Executive compensation negatively moderates the safety-performance relationship. • Short-termism and "loss aversion" mechanisms drive this negative moderation. • Equity incentives effectively mitigate the inhibitory effect of cash compensation. • State ownership provides an institutional buffer for safety-driven value gains.