This paper examines the impact of a decrease in cash/collateral on investment, using data from the 1986 oil price decline. The study focuses on non-oil subsidiaries of oil companies and tests the hypothesis that a decrease in cash/collateral leads to a reduction in investment, while holding the profitability of investment constant. The results support this hypothesis: oil companies significantly reduced their non-oil investment compared to the median industry investment. The decline in investment was concentrated in non-oil units that were subsidized by the rest of the company in 1985. The paper also explores the interdependence of finance costs within the same corporation and the role of internal capital markets in allocating capital. The findings suggest that diversified companies tend to subsidize and overinvest in poorly-performing segments. The study uses segment-level data and controls for various factors to robustly test the hypothesis, providing insights into the dynamics of corporate finance and investment behavior.This paper examines the impact of a decrease in cash/collateral on investment, using data from the 1986 oil price decline. The study focuses on non-oil subsidiaries of oil companies and tests the hypothesis that a decrease in cash/collateral leads to a reduction in investment, while holding the profitability of investment constant. The results support this hypothesis: oil companies significantly reduced their non-oil investment compared to the median industry investment. The decline in investment was concentrated in non-oil units that were subsidized by the rest of the company in 1985. The paper also explores the interdependence of finance costs within the same corporation and the role of internal capital markets in allocating capital. The findings suggest that diversified companies tend to subsidize and overinvest in poorly-performing segments. The study uses segment-level data and controls for various factors to robustly test the hypothesis, providing insights into the dynamics of corporate finance and investment behavior.