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 …

We study the effects of uncertainty on corporate leverage adjustments with respect to investment spikes and find that … overlevered and underlevered firms behave very differently in response to the combination of uncertainty and investment spikes …