In a pecking order world, debt typically grows when investment exceeds retained earnings and falls when investment is less than retained earnings while cash holdings follow an inverse pattern. Cash holdings fall when investment exceeds retained earnings and glow when investment is less than retained earnings. This relationship between cash holdings, debt and investments suggests that there is a negative relation between leverage and cash holdings as has been shown in many studies (Opler et al.. 1999: Ozkan and Ozkan. 2004: Ferreira and Vilela .2004: Guney et al.:2003: Drobetz and Gnuiinger .2006).