Leverage and Investment

Leverage and OVER investment--Yet another "ARGHHHH--why didn't I think of that!" paperShowing that leverage leads to underinvestment is standard fare for any corporate finance class. Indeed, I had planned on doing it today. However, as Lyandres and Zhdanov point out, it might be better to say that leverage influences investment, but that the direction of the bias is firm-dependent (which once