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 …

. 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 …