This paper examines firms' incentives to cooperate regarding demand-enhancing investment when they choose their production technology non-cooperatively. The technology choice endogenously determines firm heterogeneity, which, in turn, implies a difference in the proportions of investment cost firms incur under cooperation. We show that cooperation for investment deters firms from adopting efficient technology. In addition, when production technology is strategically chosen, cooperative investment is less likely than when a firm has no opportunity to upgrade its production technology. On the contrary, the likelihood of cooperation for investment does not depend on the magnitude of a fixed cost when it is strategically determined before a firm's technology choice.