Do agency problems (from the separation of ownership and control) cause public companies to invest suboptimally? In a presentation given at the Asian Finance Association conference in Macao, Alexander Ljungqvist presents evidence on differences in investment behavior between listed and private firms in the United States. Consistent with models of managerial myopia, listed firms invest less and are less responsive to changes in investment opportunities compared to observably similar private firms, especially in industries in which stock prices are particularly sensitive to current profits. Listed firms also tend to smooth earnings growth and dividends and avoid reporting losses. The evidence suggests that the stock market distorts investment, at least for the fast-growing companies in the sample.