While external forces are known to reduce the value of deferring investments under uncertainty, we examine how internal organizational competencies shape firms’ decisions to commit resources or delay. Analyzing reactivation decisions of the oil industry in Texas (2010– 2024), we introduce two mechanisms—temporally escalating adjustment costs and maintaining strategic flexibility—that influence reactivation timing. We find that uncertainty increases the likelihood of deferral, but this effect is weaker for firms with strong operational competencies and stronger for those with more reactivation expertise. These findings highlight how different competencies affect resource allocation under uncertainty and reveal firm-specific drivers of inertia beyond myopic behavior.
