This study examines how the effect of uncertainty on capital investment varies between focused firms and conglomerate … frictions, I find that uncertainty, measured by industry-level stock return volatility, has a negative effect on investment … among focused firms but has no statistically significant effect on investment among conglomerate segments. I also show that …

investment and expected returns. In imperfectly competitive industries, a firm's exposure to systematic risk is jointly affected … by its own investment strategy and the investment strategies of its industry peers, such that the dynamics of its …

Traditional finance theory suggests that riskier investments should yield higher returns. Challenging this notion … aversion, resulting in lower return investment choices. Therefore, we assess whether incentives associated with stock option … compensation (“vega”), presumed to increase managers' appetite for risk, uniformly yield higher returns on R&D investment. Our …

. The result is a negative and economically significant relation between pension risk and corporate investment. The effect … is confined to investment decisions that require discount rate estimates. Moreover, it is stronger if project value is … more sensitive to such estimates. Because of this bias, firms miss valuable investment opportunities. The results survive …