Climate Policy Uncertainty and Corporate Investment: The Real-Estate Concentration Channel

Climate policy uncertainty (CPU) suppresses corporate investment broadly, but its effect is not uniform across firms. Using a sample of 60,185 firm-year observations for nonfinancial U.S. firms from 1990 to 2024, this paper shows that industry-adjusted real-estate concentration within the hard-asset base moderates the investment response to CPU. Firms with more real-estate-concentrated tangible assets have lower investment rates on average (β=−0.042, t=−18.3), but under high climate policy uncertainty this negative relation is significantly attenuated in the continuous CPU specification (t=5.88). The attenuation is consistent with a structural floor: real-estate-heavy firms already operate in a conservative investment regime, so the additional delay induced by CPU falls disproportionately on firms with more discretionary capital deployment. The financing evidence is mixed rather than uniformly null: leverage interactions are negative (inconsistent with a collateral mechanism), and cash rises modestly under high CPU, but neither pattern absorbs the core investment interaction, pointing to real capital budgeting rather than financial structure as the dominant margin. The result is robust across alternative CPU measures and core specification checks. The evidence is associational rather than causal, but it identifies real-estate concentration as a novel, financial-statement-observable source of firm-level heterogeneity in how climate policy uncertainty transmits to corporate investment, distinct from the aggregate policy shocks, financing constraints, and industry membership emphasized in prior work.