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Abstract: Although the organization of firm boundaries is widely acknowledged as a fundamental dimension of economic performance, there is little evidence on its relation with the investment process. In particular, little is known about how firms identify, select, and pursue investment opportunities depending on their organizational form. I analyze over 3,000 projects in the movie industry in the United States requiring about $114 billion of investments in the period 1985-2007 to find that multidivisional firms invest differently from focused firms. Although multidivisional firms invest more than focused firms for otherwise identical projects, they also seem to be more responsive to short-term signals from the market, updating their beliefs and investing accordingly.