Uncertainty of uncertainty and firm cash holdings

We examine the impact on firm cash holdings of uncertainty uncertainty, measured as ex post volatility economic policy uncertainty. Using news-based index developed by Baker et al. (2016) for twenty-two countries, we find that, when there is greater firms hold more cash. Our results are robust to controlling a host firm-level and country-level factors. Consistent with (2016), consider that less associated investment; so real-option value sensitive possibility future desirability investment. Therefore, expected under rational expectations recent will also much economically significant in determining than itself. our paper not only adds literature holdings, but also, importantly, limited finance